Are moving expenses tax-deductible if I relocated for work?
Good news! If you've moved for work in Canada, you might be able to deduct your moving expenses on your tax return. But before you get too excited, there are a few things you need to know.
Eligibility Criteria
To claim moving expenses, you need to meet these requirements:
- You moved to work or run a business in a new location
- Your new home is at least 40 kilometers closer to your new workplace
- You're earning income at the new work location
What Can You Claim?
If you meet the criteria, you can deduct a variety of expenses, including:
- Transportation and storage costs for household items
- Travel expenses (including meals and lodging) to get to your new home
- Temporary living expenses for up to 15 days near the new or old home
- Costs related to selling your old home and purchasing your new one
How to Claim
To claim your moving expenses:
- Complete Form T1-M, Moving Expenses Deduction
- Calculate your eligible deduction
- Report the amount on line 21900 of your tax return
Things to Keep in Mind
- If your employer reimbursed you for moving expenses, you can only claim the portion you paid out of pocket[1].
- You can't claim expenses for things like home repairs or mail forwarding[1].
- Keep all your receipts! The Canada Revenue Agency (CRA) might ask to see them.
Carrying Forward Expenses
If your moving expenses in the year of the move are more than the income you earned at the new location, don't worry! You can carry forward the unused portion and deduct it from your income in future years[1].
Remember, tax rules can be complex, so if you're unsure about anything, it's always a good idea to consult with a tax professional or contact the CRA directly.
Happy moving, and here's to hoping for a nice tax deduction to soften the blow of relocation costs!
Citations: [1] https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21900-moving-expenses/you-claim-moving-expenses-12.html [2] https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21900-moving-expenses/you-claim-moving-expenses-6.html