Moving is probably one of the most strenuous things we do in our lives, and, sometimes expensive. The government has seen fit to at least let you write-off your moving expenses when it’s for school, a new job, or starting a business. Of course, with anything the government does there are conditions.
Can you claim moving expenses?
You can claim eligible moving expenses from the employment or self-employment income that you earned at your new residence if: you moved and established a new home to work or run a business at a new location; or you moved to be a student in full-time attendance in a post-secondary program at a university, college or other educational institution.
You moved at least 40km closer to your new work or school.
You cannot deduct your moving expenses from any other type of income such as investment income or employment insurance benefits even if you received this income at your new location. Also if you received a reimbursement for an allowance for your moving expenses you need to include this amount in your income or reduce your moving expenses by this amount. You may also be asked to provide a letter from your employer to say that you were not reimbursed for moving expenses.
If your moving expenses were greater than your net income earned at the new location you can carry forward and deduct the unused part of your moving expenses from employment income for the following years.
What can you write off as moving expenses?
If you qualify, you can claim reasonable amounts that you paid for moving yourself, your family, and your household items. Not all members of your household have to travel together or at the same time.
Transportation and storage costs (such as packing, hauling, movers, in-transit storage, and insurance) for household items, including boats and trailers.
Travel expenses, including vehicle expenses, meals, and accommodation, to move you and your household members to your new home. You can choose to claim vehicle and/or meal expenses using the detailed or simplified method.
Temporary living expenses for up to a maximum of 15 days for meals and temporary lodging near the old and the new home for you and your household members. You can choose to claim meal expenses using the detailed or simplified method. If you choose the simplified method, although you do not have to submit detailed receipts for actual expenses, we may still ask you to provide documents showing how long you stayed at the temporary lodging.
Cost of cancelling the lease for your old home, except any rental payment for the period during which you occupied the residence. However, you cannot claim rental payments for any period before the cancellation of your lease, whether or not you occupied the home during this period.
Incidental costs related to your move include the following:
- Changing your address on legal documents;
- Replacing driving licences and non-commercial vehicle permits (not including insurance); andutility hook-ups and disconnections.
- Costs to maintain your old home when vacant (maximum of $5,000) after you moved, and during a period when reasonable efforts were made to sell the home. This includes interest, property taxes, insurance premiums and heating and utilities expenses.
These costs must have been incurred when your old home was not ordinarily occupied by you or any other person who ordinarily resided with you at the old home just before the move. You cannot deduct these costs during a period when the old home was rented.
- Cost of selling your old home, including advertising, notary or legal fees, real estate commission, and mortgage penalty when the mortgage is paid off before maturity.
- Cost of buying your new home if you or your spouse or common-law partner sold your old home because of your move. These costs include legal or notary fees that you paid for the purchase of your new home, as well as any taxes paid (other than GST/HST) for the transfer or registration of title to the new home.
How to Calculate your Moving Expenses
If you choose to use the detailed method to calculate your meal expenses, you must keep all your receipts and claim the actual amount that you spent.
If you choose to use the detailed method to calculate your vehicle expenses, you must keep all receipts and records for the vehicle expenses. Claim the actual amount that you spent for your moving expenses during the tax year.
If you choose to use the simplified method to calculate your meal expenses, you may claim a flat rate per person. For the 2020 tax year it’s $23/meal up to a maximum of $69/day (including sales tax), without receipts. Although you do not need to keep detailed receipts for actual expenses, you may be asked to provide some documentation to support your claim.
If you choose to use the simplified method to calculate the amount to claim for vehicle expenses, multiply the number of kilometres by the cents/km rate for the province or territory where the travel began.
For the 2020 tax year it ranges from 47¢ for Alberta to 59.5¢ for the Northwest Territories. The CRA may still ask you to provide some documentation to support your claim. You must keep track of the number of kilometres driven during the tax year for the trips related to your moving expenses.