Line 21900 Moving Expenses Deduction

Note: Before tax year 2019, line 21900 was line 219.

See also federal 2022 budget proposal for Labour Mobility Deduction for Tradespeople.

If you moved at least 40km to be closer to a new job, to run a business, or to attend a post-secondary educational institute full time, then you may deduct the cost of moving expenses paid (not just incurred), up to the amount you earn at the new location, or up to the amount of award or scholarship income received in the year.

The new job can be with the same employer, or with a new employer. Moving expenses can be deducted if the taxpayer does not already have a job at the new location, but subsequently finds one there. See Tax Court of Canada case Abrahamsen v. The Queen, 2007 TCC 95.

Normally, for the relocation to be an "eligible relocation", both the old and the new residence must be located in Canada, except in the case of a full-time student. However, a move between two locations outside of Canada can also be an "eligible relocation" if:

	you are a Canadian resident (either factual or deemed) living out of the country, and
	you moved from the place where you ordinarily resided, to live in another place where you ordinarily reside.

You may carry excess expenses forward to be offset from income earned at the new location in the next year. When both spouses have moved and subsequently earn income in the new location, the moving costs can be split between the spouses.

Some expenses such as meals and vehicle expenses can be claimed using the simplified method (see link to Line 21900 below), which does not require receipts to be submitted. However, Canada Revenue Agency (CRA) says "Although you do not need to keep detailed receipts for actual expenses if you choose to use this method, we may still ask you to provide some documentation to support your claim." The wording of the Income Tax Act indicates that amounts may be deducted for moving expenses "paid by the taxpayer as or on account of moving expenses incurred in respect of an eligible relocation". This would imply that if no expenses were incurred for meal expenses, for instance, that there could not be a deduction for them. This is confirmed by the Tax Court case Skrien v. The Queen 2015 TCC 322.

Many costs are deductible as moving expenses, including:

	transportation and storage costs for household effects
	travel, including vehicle costs and reasonable costs for meals and accommodations in the course of moving the taxpayer and members of the taxpayers household from the old residence to the new residence
	costs of cancelling a lease for the old residence
	real estate commission, advertising, legal and other costs re selling the old residence
	legal fees re the purchase of a new home, and any tax, fee or duty (other than GST or value-added tax) imposed on the transfer or registration of title to the new residence
	costs re maintaining the old residence, up to a maximum of $5,000, while the old residence is either vacant, or not occupied by any person who ordinarily resided with the taxpayer at the old residence immediately before the move, and while the old residence is not rented by the taxpayer to any other person. These costs are deductible as long as reasonable efforts are made to sell the old residence
	change of address costs, such as replacement of drivers' licenses, non-commercial vehicle permits, and costs of connecting or disconnecting utilities

Note that if any moving costs have been reimbursed by your employer, then the moving costs must be reduced by the amount received, unless the reimbursed amount is included as income elsewhere on your tax return.

Employer-Paid Moving Expenses and Taxable Benefits

If an employer reimburses an employee for moving expenses re a transfer to a new work location, certain of these expense reimbursements will not be considered a taxable benefit to the employee, while some reimbursements will be considered a taxable benefit. When the employee has an eligible housing loss, only half of the amount exceeding $15,000 is taxable.

If the benefit to the employee is taxable, then CPP contributions and income tax must be deducted. If the taxable benefit is paid in cash, employment insurance (EI) premiums must be deducted. Non-cash benefits are not subject to EI.

For more information see Moving Expenses and Relocation Benefits on the Canada Revenue Agency (CRA) website.

TaxTips.ca Resources

Students - Moving expenses

Increased rate for meals using simplified method, effective Jan 1, 2020

Canada Revenue Agency (CRA) Resources

Line 21900 - Moving expenses

Form T1-M moving expenses deduction (to be filed with the tax return)

Income Tax Folio S1-F3-C4 Moving expenses

Revised: April 07, 2022