Moving expenses deduction

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Moving expenses deduction

Mar 7, 2023 by Gerry Vittoratos

Often overlooked, the moving expenses deduction is a great tool that allows workers and students to claim travel expenses when moving to a new job or school location. Let’s take a deep dive into this deduction.

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What is it?

The moving expenses deduction allows workers (employees and self-employed) and students to deduct the travel expenses incurred to move at least 40 kilometres closer to a new work or post-secondary school location. Students must be enrolled on a full-time basis in order to be eligible.

Which expenses can I claim ?

You can claim travel costs such as vehicle, meals, and accommodation expenses incurred to move to a new home with your household members.

For meals and vehicle expenses, you have the option of using either the detailed method to claim the actual amounts paid, or the simplified method to claim a flat-rate amount. With the simplified method, you can claim $23 per meal, and a specified amount per kilometre travelled (rates vary by province).

Other eligible expenses include :

Accommodations (hotel/motel for up to 15 days)
Cost of cancelling your lease
Costs to maintain your old home while it is up for sale, up to $5,000 (interest, property taxes, insurance premiums, heating and utilities)
Costs related to selling your old home (advertising, notary or legal fees, real estate commission, mortgage penalty)
Costs related to buying a new home (notary or legal fees, transfer or registration of title)
Incidental costs (replacement of driving licence, utility connections, change of address)

Is there a limit to this deduction?

Yes. The total amount of expenses that can be claimed is limited to the employment/self-employment income earned at the new work location. For full-time students, the eligible expenses are limited to the taxable income received from scholarships, fellowships, bursaries, certain prizes, and research grants. If, as a student, you did not receive this type of income, you can still claim moving expenses if you find employment at the new location, in which case the employment/self-employment income limit would apply.

If your expenses exceed your income, you can carry the unused amount forward to a future year.

How can I claim this deduction?

You can claim the moving expenses deduction through the T1M form.

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Gery Vittoratos Presented by UFile's tax expert
Gerry Vittoratos
MTax