A little-known fact in Canada is that many moving expenses are tax deductible and can boost your return – so keep all your moving related receipts! Here is a list of moving-related expenses that you can submit to CRA at tax time to help recoup some of the costs associated with your move:
- Traveling expenses, including car expenses for you and your family;
- Meals and accommodations on the way to the new residence;
- Costs of moving your stuff (moving van, storage, insurance, box rental etc.);
- Costs of temporary accommodation and meals for your family for up to 15 days;
- Costs of canceling your lease on the old residence;
- Incidental costs related to the move (i.e. fees for utility disconnection and hook up, mail forwarding, changing your address on documents like a passport or driver’s license).
To claim any of these moving expenses, you will have to complete form T1-M, “Moving Expenses Deduction.” On this form, you report where you moved from and to, why you moved, and the specific details and dollar amounts of your moving costs. Curiously, you don’t have to send any supporting documentation when you file but keep it in case you are audited or CRA has any questions.
The eligible moving expenses may be deducted only from your employment or self-employment income earned at the new location. If your current year’s eligible moving expenses exceeded your current year’s income at the new location, the excess can be carried forward for deduction on the next year’s tax return. And, of course, if your moving expenses were paid by your employer, you cannot deduct them. If however, your employee gave you a moving allowance, you must include this in your income and then make sure you claim all eligible moving expenses.
For additional details, please reference the Canada Revenue Agency’s website, here.