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Moving Expense Deductions & Tax Credits
Line 21900 Moving Expenses Deduction
Does the Job Have to be With a New or Existing Employer?
What is an Eligible Relocation for Moving Expenses?
Labour Mobility Deduction (LMD) For Tradespeople
Eligible Employed Tradespersons
Medical Expense Tax Credit - Travel or Moving Expenses
Line 21900 Moving Expenses Deduction
Income Tax Act s. 62, 248(1)
How Much Can Be Deducted?
If you moved at least 40km to be closer to a current or new job, to run a business, or to attend a post-secondary educational institute full time, then you may deduct the cost of moving expenses paid (not just incurred), up to the amount you earn at the new location, or up to the amount of award or scholarship income received in the year.
Does the Job Have to be With a New or Existing Employer?
The new job can be with the same employer, or with a new employer. Moving expenses can be deducted if the taxpayer does not already have a job at the new location, but subsequently finds one there. See Tax Court of Canada case Abrahamsen v. The Queen, 2007 TCC 95.
What is an Eligible Relocation for Moving Expenses?
Normally, for the relocation to be an "eligible relocation", both the old and the new residence must be located in Canada, except in the case of a full-time student. However, a move between two locations outside of Canada can also be an "eligible relocation" if:
 | you are a Canadian resident (either factual or deemed) living out of the country, and |
| you moved from the place where you ordinarily resided, to live in another place where you ordinarily reside. |
You may carry excess expenses forward to be offset from income earned at the new location in the next year. When both spouses have moved and subsequently earn income in the new location, the moving costs can be split between the spouses.
What Moving Expenses Can be Claimed?
Some expenses such as meals and vehicle expenses can be claimed using the simplified method (see link to Line 21900 below), which does not require receipts to be submitted. However, Canada Revenue Agency (CRA) says "Although you do not need to keep detailed receipts for actual expenses if you choose to use this method, we may still ask you to provide some documentation to support your claim." The wording of the Income Tax Act indicates that amounts may be deducted for moving expenses "paid by the taxpayer as or on account of moving expenses incurred in respect of an eligible relocation". This would imply that if no expenses were incurred for meal expenses, for instance, that there could not be a deduction for them. This is confirmed by the Tax Court case Skrien v. The Queen 2015 TCC 322.
Many costs are deductible as moving expenses, including:
| transportation and storage costs for household effects |
| travel, including vehicle costs and reasonable costs for meals and accommodations in the course of moving the taxpayer and members of the taxpayers household from the old residence to the new residence |
| costs of cancelling a lease for the old residence |
| real estate commission, advertising, legal and other costs re selling the old residence |
| legal fees re the purchase of a new home, and any tax, fee or duty (other than GST or value-added tax) imposed on the transfer or registration of title to the new residence |
| costs re maintaining the old residence, up to a maximum of $5,000, while the old residence is either vacant, or not occupied by any person who ordinarily resided with the taxpayer at the old residence immediately before the move, and while the old residence is not rented by the taxpayer to any other person. These costs are deductible as long as reasonable efforts are made to sell the old residence |
| change of address costs, such as replacement of drivers' licenses, non-commercial vehicle permits, and costs of connecting or disconnecting utilities |
Note that if any moving costs have been reimbursed by your employer, then the moving costs must be reduced by the amount received, unless the reimbursed amount is included as income elsewhere on your tax return.
Employer-Paid Moving Expenses and Taxable Benefits
If an employer reimburses an employee for moving expenses re a transfer to a new work location, certain of these expense reimbursements will not be considered a taxable benefit to the employee, while some reimbursements will be considered a taxable benefit. When the employee has an eligible housing loss, only half of the amount exceeding $15,000 is taxable.
If the benefit to the employee is taxable, then CPP contributions and income tax must be deducted. If the taxable benefit is paid in cash, employment insurance (EI) premiums must be deducted. Non-cash benefits are not subject to EI.
For more information see Moving Expenses and Relocation Benefits on the Canada Revenue Agency (CRA) website.
Labour Mobility Deduction (LMD) For Tradespeople
Income Tax Act s. 8(1)(t), 8(14), Income Tax Regulations s. 238(1)
This deduction, a maximum of $4,000 per year, was introduced for 2022 and later years, for eligible employed tradespersons making eligible temporary relocations. The amount of $4,000 is not indexed for inflation each year. It is claimed on the T777 Statement of Employment Expenses along with other employment expenses, and is deducted on line 22900 of the tax return.
Line 22900 employment expenses can be entered in the "other deductions" line of the Canadian Tax and RRSP Savings Calculator.
Eligible Employed Tradespersons
An eligible tradesperson is an employee involved in construction activities. This includes the erection, excavation, installation, alteration, modification, repair, improvement, demolition, destruction, dismantling or removal of all or any part of a building, structure, surface or sub-surface construction, or any similar property.
Eligible Temporary Relocation
An eligible temporary relocation must meet the following conditions:
- it is undertaken by the taxpayer to enable them to perform their duties of employment as an eligible tradesperson at one or more temporary work locations of the taxpayer within the same locality,
- prior to the relocation, the taxpayer ordinarily resided at a residence in Canada (the ordinary residence),
- The taxpayer was required by their duties of employment to be away from the ordinary residence for a period of not less than 36 hours,
- during the temporary relocation, the taxpayer temporarily resided at one or more lodgings in Canada (the temporary lodging), and
- the temporary lodging must be at least 150km closer than the taxpayer's ordinary residence to the temporary work location.
Eligible Temporary Relocation Expense
An eligible temporary relocation expense is a reasonable expense incurred by the taxpayer during the taxation year, the previous taxation year or prior to February 1 of the following taxation year, in respect of
- transportation for one round trip per eligible temporary relocation between the ordinary residence and the temporary lodging,
- meals consumed by the taxpayer during the round trip, and
- the temporary lodging, if, throughout the period of the taxpayer's
temporary relocation,
- the taxpayer maintains their ordinary residence as their principal place of residence, and
- the ordinary residence remains available for the taxpayer's occupancy and is not rented to any other person
An expense cannot be claimed if:
- it is deducted, other than as an eligible temporary relocation expense, in computing the taxpayer's income for any taxation year,
- it was deductible by the taxpayer for the immediately preceding taxation year, or
- the taxpayer is entitled to receive a reimbursement, allowance or any other for of assistance (other than an amount that is included in computing the income for any taxation year of the taxpayer and that is not deductible in computing the income of the taxpayer) in respect of the expense.
Temporary Relocation Deduction Amount
The deduction for a taxation year is the lesser of:
- $4,000,
- the total eligible temporary relocation expenses for the taxation year, and
- half of the taxpayer's total income for the taxation year from employment as an eligible tradesperson at all temporary work locations.
Medical Expense Tax Credit - Travel or Moving Expenses
The following moving or travel expenses are eligible expenses for the medical expense tax credit (METC):
| reasonable moving expenses incurred for the purpose of a disabled patient's move to a dwelling that is more accessible by the patient, or in which the patient is more mobile or functional, to a maximum of $2,000 ($3,282 for Ontario METC for 2023, $3,429 for 2024). See Moving expenses on CRA website. |
| transportation service costs, where the taxpayer has to travel at least 40 km to the location where the required medical services are provided, as long as substantially equivalent medical services are not available in the taxpayers locality. If the taxpayer has been certified by a medical practitioner to be incapable of travelling without the assistance of an attendant, then the transportation service costs of the attendant may also be claimed. |
| travel at least 80 km one way for medical services: reasonable travel expenses (meals, lodging, vehicle expenses including parking) may also be claimed. The travel costs can be calculated by keeping all receipts, or by using the CRA meal expense allowance and vehicle cost per kilometre amounts. See the CRA web page on travel expenses for medical expense, which links to information on meal and vehicle rates used to calculate travel expenses for medical travel for each province. The simplified method meal rate has been $23 per meal since January 1, 2020. |
| travel expenses outside of Canada, when a person is required to travel 80 km or more one way from their home to get medical services outside of Canada, which are eligible medical expenses - the expenses include transportation, travel, accommodations, meals and parking. |
TaxTips.ca Resources
Increased rate for meals using simplified method, effective Jan 1, 2020
Canada Revenue Agency (CRA) Resources
Line 21900 - Moving expensesForm T1-M moving expenses deduction (to be filed with the tax return)
Income Tax Folio S1-F3-C4 Moving expenses
T4044 Employment Expenses - Labour Mobility Deduction (for eligible tradespeople)
Labour Mobility Deduction (LMD) - from Budget 2022
Revised: September 20, 2024