Moving Expense Deductions
If you have relocated to start a new job or business, or to attend a post-secondary school as a full-time student then you may be eligible to claim the related moving expenses. In order to qualify, your new home must be at least 40 kilometers closer to your new workplace or school than your old home. Generally, both the old home and new home must be located in Canada, unless you are a deemed or factual resident of Canada.
Deductible expenses include cost of packing, transportation, and in transit storage of your household items as well as any associated travel expenses like vehicle usage, meals, and lodging during your trip. Actual costs or per diem deductions are available as legitimate deduction methods.
Temporary living expenses for up to a maximum of 15 days near your new, or former home for meals and lodging are deductible.
The cost of cancelling a lease, and cost to maintain your old residence if it stays vacant once you have moved out, is also eligible to a maximum of $5,000.
Incidental costs like change of address on legal forms, replacement of driver’s licenses, utility hook-ups and disconnections can be deducted.
Mortgage penalties, real estate commission, advertising costs, and legal fees from the sale of your old home may be applicable for deduction.
Cost of buying your new home which includes cost of land transfer (not GST/HST taxes), notary and legal fees.
Any of these expenses that were reimbursed by your new employer cannot be deducted.
Moving expenses must be reported in the year that they were paid and not necessarily the year of the move.
If all or part of your moving expenses is paid in the year following the year of the move, then you must report them in the following year.
If your moving expenses paid in the year of move are more than income earned at the new location, you can carry forward the unused part of the expenses and claim them in future years.
However, you cannot carry back moving expenses paid in a particular year to a previous year.
The above information is of a general nature only and should not be relied upon for specific situations. Call Marlies Y Hendricks, CPA at 416-766-3941 or submit email enquiry form below to set up a consultation.
