Moving Expense Deduction — Deduct Relocation Costs When You Move for Work or School

Do I Qualify?

• You moved to a new home in Canada
• Your new home is at least 40 km closer (by the shortest normal route) to your new workplace or school than your old home was
• You earned employment income, self-employment income, or a scholarship/bursary at the new location in the year of the move or the following year
• You incurred out-of-pocket moving expenses (moving truck, travel, temporary lodging, etc.)
• The move was for a new job, business, transfer, or qualifying post-secondary study situation

Overview

Under section 62 of the Income Tax Act, Canadians can deduct eligible moving expenses when they move at least 40 kilometres closer to a new place of work, business, or post-secondary institution. The deduction reduces taxable income directly — so at a 40% marginal rate, $10,000 in eligible moving costs saves $4,000 in taxes.

This deduction is widely underused because many Canadians either don’t know it exists, underestimate what counts as an eligible expense, or assume it only applies to employer-reimbursed relocations. It applies whether or not your employer pays anything toward the move.

What You Can Deduct

CRA’s list of eligible expenses under ITA s.62 is broader than most people expect:

Travel costs:

• Cost of transportation to move household goods (moving truck, movers, shipping)
• Vehicle expenses (gas, oil) for driving your family to the new location — either actual costs or the simplified flat rate (currently $0.70/km for the first 5,000km, $0.64/km after)
• Airfare if applicable

Accommodation and meals during the move:

• Temporary lodging and meals for up to 15 days while you are between your old and new home
• Meals during travel (actual receipts, or the simplified flat rate of $23/meal per person, max $69/day per person)

Costs to maintain your old residence:

• Up to 3 months of rent, mortgage interest, property taxes, and heat at your old home — but only while the old home is vacant and while you are making reasonable efforts to sell or rent it

Selling the old home:

• Real estate commissions
• Legal fees and notary fees for the sale
• Mortgage discharge penalty (if you had to break your mortgage to sell)

Buying the new home:

• Legal fees and land transfer taxes on the purchase of your new home — but only if you sold your old home as part of the move

Other eligible expenses:

• Lease cancellation costs at the old residence
• Cost to disconnect and reconnect utilities
• Storage costs (reasonable amounts while between homes)
• Costs to change your address on legal documents, driver’s licence, and vehicle registration

What you cannot deduct:

• Cost of cleaning your old home before leaving
• Travel expenses for house-hunting trips before the move
• Loss on the sale of your home
• Mail-forwarding fees
• Home improvement costs at either property

The Deduction Limit

Moving expenses can only be deducted against income earned at the new location in the year of the move or the following year. You cannot deduct more than you earned at the new location.

Example: You move in October and earn $20,000 at your new job before year-end. Your moving expenses total $15,000. You can deduct $15,000 in year 1 — all within the income earned at the new location.

If your income at the new location is lower than your total expenses, you can carry the unused portion forward to the next tax year.

How to Claim

1. Complete Form T1-M (Moving Expenses Deduction)
2. Enter the result on line 21900 of your T1 return
3. Keep all receipts and documentation — CRA may ask for proof

You do not attach Form T1-M to your return unless CRA requests it, but you must retain documentation for six years.

What Most People Miss

• You don’t need an employer to reimburse you. The deduction applies whether your employer pays $0 or $50,000 toward your relocation. If your employer does reimburse you, your deduction is reduced by the amount reimbursed (you can’t double-dip).
• Students qualify on scholarships. A student who receives a scholarship or research grant and moves 40km+ closer to their school can deduct moving expenses against the scholarship income — even if they have no employment income.
• The 40km test applies to the move, not the distance you travelled. Moving from Toronto to Ottawa does not automatically qualify — your new home must be at least 40km closer to your new workplace than your old home was.
• The temporary accommodation window is 15 days, not 15 nights. CRA counts calendar days between departure and permanent occupancy.
• You can move multiple times in one year. If you moved twice (e.g., for two jobs), you can potentially claim both moves, subject to the income earned at each new location.

Frequently Asked Questions

Sources

• CRA — Moving Expenses (Line 21900)
• CRA — Form T1-M, Moving Expenses Deduction
• CRA — Income Tax Act s.62 — Moving Expenses
• CRA — Meal and Vehicle Rates for 2025