How to Claim Moving Costs on Your T1 Return

Did you move this year for work, business, or school? You may be able to deduct eligible moving expenses on your personal tax return (T1).

⚠️ Important: The move must generally be within Canada to qualify for the moving expenses deduction under standard CRA rules. This deduction applies when you relocate from one location in Canada to another location in Canada to work, run a business, or attend post-secondary education.

At Toro Accounting, we help clients determine whether their move qualifies and ensure it’s claimed correctly to avoid CRA reassessments.

🔹 Who Can Claim Moving Expenses?

According to the Canada Revenue Agency (CRA), you may deduct moving expenses if:

✔ You moved within Canada for a new job location
✔ You moved within Canada to start a new business
✔ You relocated within Canada to attend post-secondary school full-time

Official CRA guidance:
👉  Line 21900 – Moving expenses - Canada.ca 

If your move was international, special rules apply and eligibility must be reviewed carefully.

🔹 The 40-Kilometre Rule

To qualify, your new home must be at least:

👉 40 kilometres closer (by the shortest public route) to your new workplace or school compared to your old residence.

If this test is not met, the deduction is not allowed.

🔹 What Expenses Are Eligible?

You can deduct reasonable costs directly related to the move, including:

✔ Transportation and storage of household items
✔ Travel costs (vehicle, meals, accommodations)
✔ Temporary living expenses (up to 15 days)
✔ Lease cancellation fees
✔ Legal fees for selling your old home
✔ Real estate commissions
✔ Utility disconnection/reconnection fees
✔ Certain mortgage penalties

🔹 What Is NOT Eligible?

❌ House-hunting trips
❌ Home staging expenses
❌ Repairs or renovations before selling
❌ Loss on sale of your home
❌ Mail forwarding services

Only costs directly related to physically relocating qualify.

🔹 Income Limitation Rule

Moving expenses can only be deducted against income earned at the new location.

For example:

• You moved within Canada for a new job
• You earned $40,000 at that new job
• You may deduct moving expenses up to $40,000

If your expenses exceed that amount, the unused portion can be carried forward to future years (as long as you continue earning income from that location).

🔹 Students: Special Rules

If you moved within Canada to attend post-secondary school full-time:

✔ You can deduct expenses against taxable scholarships, research grants, or employment income at the new location.
✔ Unused amounts may carry forward to future years.

🔹 How to Claim It

You must complete Form T1-M – Moving Expenses Deduction and retain all supporting receipts.

Because this deduction reduces net income, it may also impact:

• Canada Child Benefit (CCB)
• GST/HST Credit
• Old Age Security (OAS) clawback
• Other income-tested benefits

Proper planning can increase overall savings.

🔹 Common Mistakes We See

❌ Assuming international moves automatically qualify
❌ Not meeting the 40 km rule
❌ Claiming expenses before earning income at the new location
❌ Not limiting the claim to income earned at the new job
❌ Failing to keep documentation

The CRA frequently reviews moving expense claims — accuracy matters.

💼 How Toro Accounting Can Help

At Toro Accounting, we:

✔ Confirm eligibility for moves within Canada
✔ Review the 40 km calculation
✔ Calculate allowable deductions correctly
✔ Structure carryforward amounts
✔ Reduce CRA reassessment risk

Moving is a big transition — let’s make sure your tax savings move with you.

📞 Book Your Tax Appointment

If you moved within Canada this year and want to ensure you’re maximizing your deduction:

👉 Book your personal tax consultation here