57 Describe moving expenses and how they are treated for tax purposes.
Leonor Lanon
Who can claim moving expenses in respect of an eligible relocation? ITA – 248(1)
Self-employed individual or employees and students can claim eligible moving expenses related to their relocation from one place to another within Canada.
What are the conditions to claim moving expense (an “eligible relocation”)? ITA – 248(1)
To qualify, the person’s new home must be at least 40 kilometers (by the shortest usual public route) closer to a new work location or post-secondary institution.
What are examples of eligible and non-eligible “moving expenses”? ITA – 62(3)
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Eligible Moving Expenses |
Ineligible Moving Expenses |
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Travelling cost in moving family members to new residence Transportation and storage cost Meals and accommodation near the old or the new residence not exceeding 15 days Cost of cancelling lease of the old residence Selling cost in respect of sale of old residence Expenses related to purchase of new residence
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Expenses for work done to make your old home more sell-able Any loss from the sale of your home Travel expenses for house-hunting trips before you move or job hunting in another city Expenses to clean or repair a rented home to meet the landlord’s standards Costs incurred in the sale of your old home if you delayed selling for investment purposes or until the real estate market improved |
Simplified Method – CRA allows you to calculate meal and vehicle rates using the Simplified Method. As of 2019 the meal rate is $17/meal to a maximum of $51/day. The kilometer rate varies by province but is currently $0.54 per km in BC. Although you do not need to keep detailed receipts for actual expenses if you choose to use the Simplified Method, the CRA may still ask you to provide some documentation to support your claim.
How are they treated for tax purposes?
You can only claim moving expenses in the year up to the amount of employment income at the new location. If eligible moving expenses are more than the net eligible income earned at the new location or the taxable amount of awards in the year, the difference can be carried forward and deducted from employment or self-employment income earned at the new location or from the taxable portion of award income in the following years. However, you cannot carry back moving expenses to a prior year.
Interactive content (Author: Leonor Lanon, March 2019)
Interactive content (Author: Mehak Sampla, June 2019)
References and Resources:
- Article – “Line 219 – Moving expenses” (Author: Government of Canada)
- ITA 62(1), 62(2), 62(3), 248(1) – “Eligible Relocation”
