Moving can be expensive, but did you know that some of those costs might be tax-deductible?
If you’re relocating for work, school, or a business, the Canada Revenue Agency (CRA) allows you to claim eligible moving expenses to help reduce your tax bill. A nice bonus to alleviate the stresses of moving!
In this guide, we’ll break down Line 21900 – Moving Expenses, who qualifies for the deduction, what expenses you can and can’t claim, and how to maximize your tax savings.
Key Points
- You can claim moving expenses if you moved at least 40 km closer to work, school, or business.
- You can claim various moving expenses, such as transportation, storage, travel, temporary living costs, and packing materials.
- You can claim your moving expenses by filling out Form T1-M and by reporting the expenses on Line 21900 of your tax return. Be sure to keep detailed receipts.
Can You Claim Moving Expenses as a Tax Deductible?
Yes, under certain conditions! The moving expenses tax deduction allows you to claim certain costs if you’ve moved at least 40 km closer to your new place of work, business, or school.
What Is the “Line 21900 – Moving Expenses” Tax Deductible?
Line 21900 refers to the section on your income tax return where you report moving expenses. If eligible, you can deduct reasonable moving costs from your taxable income, lowering your overall tax liability.
How Does The Moving Tax Credit Affect Your Taxes?
- Reducing Taxable Income – By deducting moving expenses, your taxable income decreases, meaning you’ll owe less in taxes.
- Impact on Refunds – A lower taxable income can increase your tax refund or reduce the amount you owe when it comes to filing your taxes.
Who Can Claim Moving Expenses As A Deductible?
To qualify for the moving expense deduction, you must meet the following criteria:
- You moved at least 40 km closer to your new work, school, or business location.
- You are a full-time student moving for school or a worker/business owner relocating for employment purposes.
- You earned income at the new location (either through employment or self-employment).
Note: Make sure you save your proof of address, receipts, bills etc. to support the claim.
Special Considerations
Self-Employed Individuals – Self-employed people can also claim moving expenses as long as the move is for business purposes and meets the 40 km rule.
Government Employees – If you are a government employee moving due to work reassignment, you may still be eligible, but you should check if your employer reimburses relocation costs.
Students – Full-time post-secondary students moving to attend university or college can also claim moving expenses, but deductions are only allowed against taxable income (e.g., scholarships, research grants, or employment income earned at the new location).
What Are Eligible Moving Expenses?
The CRA allows deductions for several moving-related costs, including
| Transportation Costs | – Hiring movers – Renting a moving truck – Gas and mileage if you use your own vehicle |
| Storage Costs | – Temporary storage for your belongings – Locker rental fees |
| Travel and Lodging | – Costs for you and your family to travel to your new home (including flights, train tickets, or gas) – Hotel stays along the way |
| Cost of Temporary Living | – Up to 15 days of temporary accommodations (hotel or short-term rental) while settling into your new home. This includes meals as well! |
| Packing and Shipping | – Packing materials – Moving insurance – Mail forwarding fees |
| Disposal of Old Property | – Fees related to cancelling a lease – Real estate commissions (only if selling a home due to a required move) |
What Moving Expenses Can’t You Claim?
Not all moving expenses qualify for a deduction. Here are some non-deductible expenses:
| Personal Costs | – Cleaning your old home – Home staging costs – Costs associated with purchasing furniture or decor |
| Meals Beyond Travel | – Food costs during travel can be claimed, but regular meals before or after the move are not eligible. |
| Real Estate Fees | – Land transfer taxes – Legal fees related to home purchases (unless selling due to a required move) |
| Home Improvements | – Renovation costs to increase property value or prepare your home for sale are not deductible. |
How To Claim Your Moving Expenses On Your Taxes
To claim moving expenses, you need to fill out Form T1-M (Moving Expenses Deduction) and report the eligible amount on Line 21900 of your tax return.
Rules On Receipts
- Keep detailed receipts for all expenses.
- If claiming mileage, maintain a logbook with odometer readings.
- Credit card or bank statements alone are not enough; you need itemized receipts.
- You also want proof of addresses of your former home, new home and workplace which you are moving closer to.
Learn more: Which Receipts Should I Keep For Taxes In Canada?
How Much Can You Claim?
You can only deduct moving expenses up to the amount of income earned at your new location or up to the scholarship or grant you receive as a student that year. If you don’t use the full deduction in one tax year, unclaimed moving expenses can be carried forward to future years.
Self-employed individuals may be eligible for a refund if they overpay taxes due to moving expenses.
Bottom Line—A Moving Bonus
If you’ve moved for work, school, or business, claiming moving expenses can help lower your tax bill and maximize your refund. Just make sure you meet the eligibility criteria, keep your receipts, and follow CRA rules when filing your tax return.
Imagine spending $5,000 of moving expenses and getting that amount reduced from your taxable income. This can yield great savings when it comes time to pay your taxes.
