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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.
Cleo HamelSenior tax pro and national spokesperson
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COMMENTS
what is the time limit for claiming moving expenses. I don’t think my daughter claimed any 3 yrs. ago.
Shirley – If your daughter has eligible moving expenses, she can submit a T1 Adjustment Form (http://www.cra-arc.gc.ca/E/pbg/tf/t1-adj/README.html) to claim her moving expenses in the right year. She should include all related receipts with the T1 Adjustment form and it must be mailed to the Canada Revenue Agency. It can take 6-8 weeks for processing. CH
I had to move this summer for my fiance’s job, we weren’t living together prior to the move but are now. Can I claim my personal move expenses?
In order to claim moving expenses, you have to have moved more than 40 kilometres and you need employment income in your new location. If you meet the requirements, you should be eligible to claim your moving expenses. If you are not working in your new location yet, you may be able to carry forward your expenses to a year when you are earning income. For a list of eligible expense, please see http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/219/menu-eng.html.
My husband changed jobs this past summer and we sold our house in July. We purchased a new home (more then 40 km) but because this house was not yet constructed we had to live with my parents for the past 5 months while our house was being built and we just moved in Feb 9,2012. So my question is how do I claim the moving expenses? Was living with my parents considered our “new residence”? Will I still be able to claim the legal fees from purchasing our house?
I am assuming your parents place is close to where the new house is being built so most of the moving expenses had been incurred. You would therefore claim all of your moving to that point against income from your new location. As to timing and the legal on the new home purchase it is hard to determine without seeing all the information so you should maybe go into one of our offices so that they can look at all the information to give you the best advice. Also in order to claim cost of buying the new home you would have had to own a home in the old location. DM
I was employed with my current company for about 1.5 years when I purchase a home (more than 40km closer to work) and moved there last May. I have two questions:
1. can the move be claim as a moving expense? (when i read the tax return guide it seems like the move needs to be related to new work location – but I am still working for the same company)
2. if I didn’t own or rent a home previously, am I still eligible to claim the moving expense to my new place?
Alex – If you moved more than 40kms for a new job you can claim moving expenses and that does include cases where you didn’t rent or own before. However, there have a few cases of people being able to claim moving expenses without have a new job, but rather working at the same company. See this case:
http://www.hrbtaxtalk.ca/blog/court-decision-may-change-moving-expense-claims/
If you do choose to claim the moving expenses, you need to be prepared to fight your case if the CRA challenges it.- CH
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