Moving Expense Deduction: Complete Guide

Eligibility Requirements

The 40 Kilometer Rule

Your new home must be at least 40 kilometers closer to your new work or school location than your old home. This is measured by the shortest normal route, not straight-line distance.

Qualifying Moves

• Employment: Moving to start a new job or work at a new location for your current employer
• Self-employment: Moving to operate a business at a new location
• Post-secondary education: Moving to attend full-time college or university
• Returning to Canada: Moving back to work or study after living abroad

What Doesn't Qualify

• Moving to retire
• Moving without a job or school destination
• Moving for personal reasons unrelated to work or study
• Moves where the 40km rule isn't met

Eligible Moving Expenses

Transportation & Travel

• Cost of moving household items (movers, truck rental)
• Vehicle costs to drive to new home (fuel, per-km rate)
• Airfare, bus, or train tickets for family members
• Meals and accommodation during the move
• Cost of moving pets

Temporary Living Expenses

• Up to 15 days of meals and temporary lodging near old or new home
• Applies when you can't move directly into your new home
• Can use simplified or detailed method for meals

Old Residence Costs

• Legal fees for selling your old home
• Real estate commission
• Mortgage prepayment penalty (limited)
• Costs of cancelling a lease
• Advertising costs to sell your home

New Residence Costs

• Legal fees for buying new home (up to limit)
• Land transfer tax (if selling old home)
• Connecting/disconnecting utilities
• Changing address on legal documents

Expenses You Cannot Claim

• Costs for house-hunting trips
• Cleaning or repairing your old residence
• Losses on selling your old home
• Mortgage default insurance
• Interest on bridge loans
• Expenses reimbursed by your employer (unless included in income)

How to Calculate Moving Expenses

Simplified Method for Meals

You can claim a flat rate for meals without receipts:

• 2024 rate: $23 per meal, maximum $69 per day per person
• No receipts required
• Must be reasonable for the distance traveled

Simplified Method for Vehicle

Claim per-kilometer rate for driving to your new location:

• 2024 rates vary by province: Generally $0.59-$0.72 per km
• No receipts required for fuel
• Based on most direct route

Detailed Method

Track and claim actual costs with receipts. May result in higher deduction if your actual expenses exceed the simplified rates.

Income Limitation

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

• Employment move: Deduct against employment income from new job
• Self-employment move: Deduct against self-employment income at new location
• Student move: Deduct against scholarships, bursaries, and research grants

Carry Forward

If your moving expenses exceed your qualifying income at the new location, carry forward unused amounts to future years. This is common for students who move but have limited scholarship income.

Employer Reimbursements

If your employer reimburses or pays for moving expenses:

• Non-taxable reimbursement: You cannot claim those expenses
• Taxable allowance: Include allowance in income, claim full expenses
• Partial reimbursement: Claim only the unreimbursed portion

Form T1-M: Moving Expenses Deduction

Calculate your moving expense deduction using Form T1-M, which requires:

• Old and new address
• Distance to work/school from each location
• Itemized list of expenses
• Supporting calculations

Special Situations

Students

• Must be full-time student at post-secondary institution
• Can only deduct against taxable scholarship/bursary income, grants, or employment income at new location
• Can carry forward unused expenses

Multiple Moves in One Year

You can claim multiple qualifying moves in the same year, each with its own 40km requirement and income limitation.

Moving Back for Work After School

If you move to another location for work after completing studies, you may be able to use carried-forward moving expenses from your original school move.

Documentation Requirements

Keep receipts and records for 6 years:

• Moving company invoices or truck rental receipts
• Hotel and meal receipts (if using detailed method)
• Fuel receipts and odometer readings
• Legal fees and real estate statements
• Proof of old and new addresses
• Employment records showing new work location

Example Calculation

Sarah moves from Toronto to Ottawa for a new job. Her expenses:

• Moving company: $2,500
• Driving (450 km × $0.70): $315
• One night hotel: $150
• Meals (simplified, 2 days × $69): $138
• Temporary lodging (10 days): $1,500
• Legal fees (selling old home): $1,000
• Total eligible expenses: $5,603

If her new job income is $50,000, she can deduct the full $5,603, reducing taxable income to $44,397.