Moving for work this summer?
If you move more than 40 kilometres for employment reasons, you may be able to claim your moving expenses on your 2011 return. But you need to keep your receipts and records.
Summer is a popular time to move for many reasons. No matter how far you move, there are always a lot of related expenses, and if the relocation is required for employment purposes some of those costs may be a tax deduction.
You can claim moving expenses if you meet two criteria. The first is you must move for employment purposes, whether it is a relocation or a new position, and the move has to be more than 40 kilometres. Without meeting both conditions, expenses cannot be claimed.
If you qualify, you can claim:
- transportation and storage costs
- travel expenses to move you and your family to your new place
- up to 15 days of temporary accommodation (if needed during your move)
- the cost of cancelling your lease at your old residence
- legal fees to purchase a new residence
- taxes on the transfer of title
- the cost of selling your old residence can be deducted. This would include the mortgage penalty for breaking your mortgage before maturity
- incidentals like the cost of connecting utilities in your new location can also be added to your receipts
If you failed to keep all your gas and meal receipts, you do have the option of using the simplified method to calculate your vehicle and meal expenses. This means you can claim $17 per meal, for a total of up to $51 per day for each family member moving. And mileage is based on a per-kilometre rate established by the CRA.
You can only deduct your expenses against the employment income in your new location. This means if you move later in the year, you may not have enough income to deduct all of your moving expenses. You can carry forward unused amounts to the following year or your spouse or common-law partner can claim the remainder, but again it must be against employment income earned in the new location.
Also, for tax purposes you do not require a new job immediately when you move. There is no specific time limit, but the purpose of the move must be to get a new job, so you would not be able to carry the expenses forward indefinitely without ever having employment income at the new location.
Moving expenses are one of the most reviewed tax credits, so you need to keep your receipts and documentation because the Canada Revenue Agency will likely ask for it.
Senior tax pro and national spokesperson