Moving Expenses Tax Deduction Canada
If you moved at least 40 km closer to a new job, business, or full-time post-secondary school in Canada, you can deduct eligible moving expenses using CRA Form T1-M. Eligible expenses include transportation costs, travel expenses, temporary living costs (up to 15 days), and lease cancellation fees. You can only deduct against income earned at your new location.
Deduction = Total Eligible Expenses (transportation + travel + temporary living + selling costs) — limited to income earned at new location
The Canada Revenue Agency allows you to deduct moving expenses if you relocated to be at least 40 kilometres closer to a new work location, business, or full-time post-secondary school. This deduction can save you hundreds or even thousands of dollars on your tax return.
This guide walks you through everything you need to know about claiming moving expenses on your 2025 or 2026 Canadian tax return using Form T1-M, including which expenses qualify, how to calculate your deduction, and common mistakes to avoid.
What This Means
Your estimated deduction shows the maximum amount you can claim against your employment or self-employment income earned at the new location. Remember: you can carry forward unused moving expenses to future tax years if your current-year income at the new location doesn't cover the full deduction.
The 40 km Rule Explained
To qualify for the moving expense deduction, your new home must be at least 40 kilometres closer to your new work or school location than your old home was. The CRA measures this using the shortest normal route available to the public — not a straight line.
Example: Your old home was 55 km from your new workplace. Your new home is 10 km from your new workplace. The difference is 45 km, which exceeds the 40 km minimum. You qualify.
Who qualifies:
- Employees who start work at a new location in Canada
- Self-employed individuals who start a new business at a new location
- Full-time students at a post-secondary institution (deduct against scholarships, bursaries, research grants, and employment income at the new location)
- Individuals who move back to Canada after working abroad (certain conditions apply)
Who does NOT qualify:
- People who move but don't change work or school locations
- Part-time students
- People who move less than 40 km closer to their work/school
Eligible Moving Expenses (Complete List)
CRA Form T1-M lists all expenses you can claim. Here's the complete breakdown:
| Category | Eligible Expenses | Typical Amount |
|---|---|---|
| Transportation & storage | Moving company fees, truck rental, portable containers, packing materials, insurance for belongings in transit, storage (up to 15 days) | C$1,500 – C$10,000 |
| Travel expenses | Vehicle costs (gas, tolls) or airfare/bus for you and your family, meals during travel (flat rate or receipts), accommodation en route | C$200 – C$2,000 |
| Temporary living costs | Meals and accommodation near old or new home (maximum 15 days each), limited to C$51/meal per person (2025 rates — check current CRA flat rates) | C$500 – C$3,000 |
| Old residence costs | Lease cancellation fees, utility disconnection fees, mortgage penalty/interest (limited), property insurance, property taxes, maintenance costs while vacant | C$200 – C$5,000 |
| New residence costs | Legal fees, land transfer tax (only if you sold old home), utility connection fees | C$500 – C$3,000 |
| Selling costs (old home) | Real estate commission, legal fees, advertising, mortgage discharge fees | C$5,000 – C$30,000 |
NOT eligible: Losses on selling your home, house-hunting trips before the move, job search costs, mail forwarding fees, driver's licence transfer fees, vehicle registration changes, or costs to renovate the old home for sale.
How to Claim: T1-M Form Step-by-Step
Follow these steps to claim your moving expenses on your Canadian tax return:
- Gather receipts: Collect all receipts for eligible expenses. You don't need to submit them with your return, but CRA may ask for them later. Keep receipts for 6 years.
- Complete Form T1-M: Download Form T1-M from the CRA website. Fill out each section:
- Part 1: Your information and move details
- Part 2: Transportation and travel expenses
- Part 3: Temporary living expenses (up to 15 days)
- Part 4: Cost of selling old residence / cancelling lease
- Part 5: Cost of new residence (if sold old one)
- Calculate vehicle expenses: You can use the simplified method (flat rate per km driven — currently C$0.70/km for the first 5,000 km, C$0.64/km after) or the detailed method (actual gas, oil, repairs, insurance pro-rated for the move).
- Calculate meal expenses: Use the simplified method (flat rate of C$23 per meal, 3 meals/day = C$69/day per person) or the detailed method (actual receipts — no alcohol).
- Enter on your tax return: Transfer the total from Form T1-M to Line 21900 of your T1 income tax return.
- File: Keep Form T1-M with your records. If filing electronically, CRA may ask you to submit it later.
Real-World Deduction Examples
Here are three common scenarios showing how the moving expense deduction works:
Example 1: Employee relocating within Ontario
Sarah moves from Ottawa to Toronto for a new job in March. Her eligible expenses:
| Expense | Amount |
|---|---|
| Moving company | C$3,200 |
| Travel (450 km × C$0.70/km) | C$315 |
| Meals en route (2 people × C$69) | C$138 |
| Hotel en route (1 night) | C$165 |
| Temporary accommodation (10 days × C$150) | C$1,500 |
| Temporary meals (10 days × 2 people × C$69) | C$1,380 |
| Lease cancellation fee | C$1,500 |
| Utility disconnection | C$85 |
| Total eligible | C$8,283 |
Sarah earned C$55,000 at her new job by year-end, so she can deduct the full C$8,283.
Example 2: Student moving for university
James moves from Winnipeg to Montreal for a full-time master's program. His eligible expenses total C$4,200. His scholarships and part-time campus job earn him C$22,000. He can deduct the full C$4,200 against that income.
Example 3: Carrying forward expenses
Mike moves from Vancouver to Halifax in November and only earns C$8,000 at his new job before year-end. His eligible expenses are C$12,500. He deducts C$8,000 in the current year and carries forward C$4,500 to next year.
Common Mistakes When Claiming Moving Expenses
Avoid these frequent errors that can delay your refund or trigger a CRA review:
- Claiming expenses against wrong income: You can only deduct moving expenses against income earned at your new work location. If you move mid-year, only income from the new job counts — not income from your old job.
- Exceeding the 15-day limit: Temporary living costs (meals and accommodation) are capped at 15 days near the old home and 15 days near the new home. Don't claim more.
- Forgetting the 40 km rule: Measure the shortest driving route, not a straight line. Use Google Maps to verify your distance.
- Claiming ineligible expenses: House-hunting trips, renovations to sell your home, and losses on the sale are NOT deductible. Neither are gym cancellation fees, cable cancellation fees, or moving pets.
- Not keeping receipts: Even though you don't submit receipts with your return, CRA can request them for up to 6 years. Use the simplified method for meals and vehicle costs if you've lost receipts.
- Double-claiming reimbursed expenses: If your employer reimburses some moving costs, you must subtract the reimbursement from your claim. Only claim the net amount.