Moving for a new job, a new business location, or full-time study costs real money, and much of it comes off the income you earn at the new place. Moving expenses go on line 21900, and they are calculated on Form T1-M, Moving Expenses Deduction.
Generally, you can claim moving expenses you paid in the year if two things are true. You moved to a new home to work, to run a business out of a new location, or to be a student in full-time attendance in a post-secondary program at a university, college, or other educational institution. And your new home is at least 40 kilometres closer, by the shortest public route, to your new work location or school.
What you can claim
If you qualify, you can claim most amounts that you paid for moving yourself, your family, and your household items. Not all household members have to travel together or at the same time.
- Transportation and storage costs for household items, including boats and trailers — packing, hauling, movers, in-transit storage, and insurance
- Travel expenses to move you and your household members to your new home, including vehicle expenses, meals, and accommodation
- Temporary living expenses for a maximum of 15 days, for meals and temporary lodging near the old or new home
- The cost of cancelling your lease for your old home, except any rental payments before the cancellation
- Incidental costs — changing your address on legal documents, replacing driving licences and non-commercial vehicle permits (not including insurance), and utility hook-ups and disconnections
- The cost to maintain your old home while it was vacant after you moved, up to a capped amount, during a period when reasonable efforts were made to sell it: interest, property taxes, insurance premiums, and heating and utilities
- The cost of selling your old home — advertising, notary or legal fees, real estate commission, and a mortgage penalty when the mortgage is paid off before maturity
- The cost of buying the new home, if you or your spouse or common-law partner sold your old home because of your move, including the legal or notary fees to buy it and any taxes paid, other than GST/HST, for the transfer or registration of title
The vacant-home costs come with a condition worth reading twice: you cannot claim them for a period when the old home was rented, and the costs must have been incurred when it was not occupied by you or anyone who lived with you there just before the move.
What does not qualify
None of the following can be claimed at all:
- expenses for work done to make your old home more saleable
- any loss from the sale of your home
- travel expenses for house-hunting trips before you move
- travel expenses for job hunting in another city
- the value of items movers refused to take, such as plants, frozen food, ammunition, paint, and cleaning products
- expenses to clean or repair a rented home to meet the landlord's standards
- expenses to replace personal-use items such as tool sheds, firewood, drapes, and carpets
- mail-forwarding costs
- costs of transformers or adaptors for household appliances
- costs incurred in the sale of your old home if you delayed selling for investment purposes or until the real estate market improved
- mortgage default insurance
Generally, you cannot deduct the cost of moving a mobile home. However, if you have personal items in a mobile home when it is moved, you can deduct the cost of moving the home as long as it is not more than the estimated cost of moving those personal items separately.
Detailed method or simplified method
For vehicle and meal expenses you can choose between two methods, and the choice decides what paper you need.
The detailed method. You must keep all of your receipts and claim the actual amount that you spent. For vehicle expenses, keep all receipts and records for the vehicle.
The simplified method. For meals you may claim a flat rate per person. For vehicles you multiply the number of kilometres by the rate for the province or territory where the travel began. You do not have to keep detailed receipts for the actual expenses, but you must keep track of the number of kilometres driven for the trips related to your move — and the CRA may still ask you to send documents to support your claim. For temporary lodging under the simplified method, the CRA may ask for documents showing how long you stayed.
So "simplified" removes the receipts, not the record-keeping.
When you can claim it
You can deduct eligible moving expenses only from the employment or self-employment income you earned at your new work location. For a student, they come off only the parts of your scholarships, fellowships, bursaries, certain prizes, or research grants that are required to be included in your income.
You cannot deduct moving expenses from other income, such as investment income or employment insurance benefits, even if you received that income at the new location.
If your net moving expenses in the year of the move are more than your net eligible income at the new location, you can carry the unused part forward and deduct it from the same type of income in a future year. You cannot carry moving expenses back to a prior year.
If your moving expenses were paid in a year after the year of your move — a delayed home sale is the usual reason — you claim them on the return for the year you paid them. The CRA may ask you to send Form T1-M with the receipts and explain the delay in selling your home.
If you received a reimbursement or an allowance from your employer for your eligible moving expenses, you can only claim them if you include the amount you received in your income or if you reduce your moving expenses by the amount received. The CRA may ask you to send a letter from your employer saying that you were not reimbursed for the moving expenses you are claiming.
What your receipts must show
The CRA does not enumerate the fields a moving receipt has to carry; it requires that you keep all the receipts and records supporting your claim. What each document needs to make clear is:
- the vendor or payee — who you paid
- the date paid
- the amount, including any GST/HST on eligible services, which is also claimable
- a description of the service — moving, storage, lodging, lease cancellation, legal work, a utility connection
One of the CRA's listed situations where a claim is not allowed is simply this: you do not have the required supporting documentation.
What to keep
Keep every invoice and receipt from the move, your kilometre and travel records, and your completed Form T1-M. You must complete a separate Form T1-M for each eligible move.
Do not send any supporting documents when you file your tax return. Keep them in case the CRA asks to see them later.
A move scatters paper across months and sometimes across two tax years. Dossier tags each moving receipt as it arrives and files it under the year it was paid in, which is the year that decides where it can be claimed.
Official CRA sources
Source: Canada Revenue Agency (canada.ca). Not tax advice.