For many Canadian families, moving can be an exciting adventure. The thrill of a new location brings new friends and new experiences. But moving can also be an expensive endeavour. Bills for moving services, real estate commissions, legal fees, and changing utility accounts add up quickly. The good news is that you may be eligible for a tax break. Taxpayers relocating to pursue full-time post-secondary education, employment, or to improve accessibility for physically impaired individuals may qualify for a tax deduction to help offset moving expenses.
Students Moving for Post-Secondary Education
Full-time students moving at least 40 km closer to their post-secondary institution can deduct eligible moving expenses from certain taxable income including any fellowships, grants for research, scholarships, bursaries, and select academic prizes.
Students Moving for Work
Are you a student working your way through school? If the distance between your residence and workplace is at least 40 kilometres, students who move to work can deduct eligible moving expenses from the income earned during the employment. Eligible work includes co-op employment, summer employment or running a business. Students can claim the deduction for moving at the start of each academic period, and co-op students can also claim costs incurred when moving back from a work period.
Moving for Mobility Issues
The physically-impaired may qualify for a tax deduction when moving to a more accessible home that improves their ability to function independently. Claim up to $2,000 ($2,518 for Ontario residents) of eligible moving expenses when relocating a person suffering from a physical development or prolonged impaired mobility. To be eligible, these expenses can’t have been claimed on a tax return as regular moving expenses for work or education reasons.
Moving for Work
Work-related moving decisions are tough for many Canadians, and involve careful planning, especially if your household includes children and pets. Keep these points in mind when determining your claim for a tax deduction.
- If your new home is at least 40 kilometres closer to a new job or business, you can deduct your eligible moving expenses from the income earned through your new employment or business.
- If this income is less than your expenses, you may carry the extra expenses forward to a future tax year.
- If you receive a moving allowance or relocation package from your new employer and declare it as income, you can only deduct eligible expenses that weren’t covered in the package, unless you declare the allowance as income.
When you claim a tax deduction for moving, remember to keep receipts, invoices and supporting documents for all eligible expenses. Canada Revenue Agency will require them if you are audited.
For more information including a full listing of eligible moving expenses, visit these pages at the Canada Revenue Agency:
- Information About Moving Expenses
- Line 219 – Moving Expenses
- List of Eligible Medical Expenses
- Back to School? Save Your Receipts
Important Tip: If you are moving to or from Canada, or between two locations outside of Canada, visit the Canada Revenue Agency website for further details on eligibility for these deductions.