Moving Expenses Tax Deduction

You can claim moving expenses if:

1. You moved to a new home to work as an employee or run a business at a new location; or
2. You moved because of your studies to start or continue as a full-time student at some college, university or other educational institution

It simply means that you can claim moving expenses as an employee, self employed or as a student.

Eligibility: To be eligible to claim moving expenses, this move must be at least 40 km closer to your new work location or school. The distance of 40 km will be calculated by using the shortest route.

ELIGIBLE MOVING EXPENSES

1. Travel Expenses: You can claim travel expenses which typically include your car/motor vehicle expenses while you are moving. Included in those are your meals and temporary accommodations while you are moving towards your new home.

Travel Expenses can be claimed by using either a Detailed Method or Simplified Method

Detailed Method: In this method, you have to keep all of your receipts for meals and auto expenses incurred while moving. Only actual amounts paid for these expenses can be claimed under this method

Simplified Method: Under this method you don’t need to keep detailed records or receipts, rather you can use a flat rate per meal ($17/meal to a maximum of $51/day :2016). For vehicle expenses, you can claim (54 cents/KM in Ontario:2016, each province rate varies) and multiply by the number of kilometers you traveled.

Under Simplified Method ‘some’ but ‘not detailed’ documentation might be required.

2. Transportation and Storage Costs: Expenses incurred for packing, paying to movers, temporary storage etc. of household items.
3. Temporary Living Expenses: You can claim certain temporary living expenses between your old and new homes by choosing either the detailed or simplified method. But remember that you can claim maximum of 15 days of expenses.
4. Lease Cancellation: if you have to pay any lease cancellation cost because of your moving, then you can claim it.
5. Incidental Costs: These costs result from your moving and might include costs of changing your address on legal documents, replacing driver license etc.
6. Vacancy Costs: If your old home is still vacant after you have moved although reasonable efforts have to made to sell the old home, you can claim maximum $5,000 of costs under that instance. Normally the costs would include interest, property taxes, insurance and utilities.
7. Selling Costs: You can deduct your old home sale related costs like advertising, legal fees, real estate fees, mortgage penalty if any, etc.
8. Buying Costs: If you are buying a new home because of your move and selling your old home, then you can deduct some of the new home related costs such as legal fees for transferring the title of the new home or any other taxes.
9. Other Moving Expenses: any other moving expenses not fitting under one of the above commonly claimed categories.

INELIGIBLE MOVING EXPENSES:

Although there is a long list but some the moving expenses like any renovations made to your old home to make it more saleable, loss from your old home, house-hunting trip costs, job hunting costs, mail forwarding costs, mortgage default insurance costs are not considered eligible.

NOTE: If you are reimbursed by your employer for all the moving expenses incurred then, you can not claim moving expenses. Moreover, you can’t deduct moving expenses against EI income even if you received that EI income at your new location. Income must be from the new employer at new location or self employment income from new location.

Generally speaking, try to keep as much records as possible as CRA might ask to present any of the required documents to support your claim.