Moving for work or school: Reducing taxes with distance

It has been a tough year. A significant amount of people across Canada have had to alter their lives in ways they never thought possible – working from home, homeschooling children, finding a new job, learning a new skill, or just trying to stay healthy in an unusual environment. Sometimes, you have to move your life across a city, province or country to keep moving forward, and a lot of people don’t know that you can get some help on your taxes for doing just that. Moving expenses can usually be claimed on your taxes provided you can answer one crucial question:

Did you move at least 40 kilometers closer to work or education?

If so, then there are several items that you can claim on your taxes. It is even possible within city limits as Calgary is over 40 kilometers long and 30 kilometers wide. If your move includes any surrounding towns or cities such as Airdrie, Chestermere, Cochrane or Langdon, there is an even higher likelihood provided your move is in the direction of your workplace or post-secondary institution. Below is information on what you need to know and what you’ll be able to claim.

1.     What counts as work or education?

Moving for work indicates that you have a new location you are required to travel that initiated the move. Moving and then searching for work likely won’t work in your favor, but provided you start working within a reasonable amount of time of the move, you would be able to qualify. The same goes for education – provided it is for full-time post-secondary studies and may or may not include a summer or seasonal job. This claim is eligible against any income earned at the new location, as well as scholarships, bursaries or grants in the case of post-secondary education. 

2.     What expenses can I claim?

There are several kinds of expenses available to claim for moving for work or education. The most common of these are travel costs are meals & accommodations. If you drove, you’ll have gas and if you flew, you’d have a plane ticket. The meals & accommodations expense is based on how long it took you to move. Longer distances take more time, and all family members might not move together at the same time. With the more specific items, it is best to ask yourself whether you would have incurred that expense if you weren’t moving. Here is a longer list of the items that are available:

·       Travel Expenses

·       Meals and Accommodations

·       Storage Costs

·       Vehicle Rental

·       Moving Assistance (hiring movers, packing materials, insurance)

·       Lease Cancellation Costs

·       Document & Service Changes (Licensing, Legal Fees, Utility hook-ups & disconnections, etc)

·       Previous Home Costs while attempting to sell (utilities, property taxes, interest and insurance)

3.     What records should I keep?

Keep everything. While there are two different methods you can use to claim travel costs and meals & accommodations, CRA reserves the right to question your claim. You may end up missing out if you don’t have receipts for the different expenses, or a log to document the move to provide backup regarding a timeline. 

            Moving can be fun and exciting, or stressful and annoying. It would be quite unfortunate to go through all the work of getting to a new job or class in another city and find out that you can’t claim it because you forgot to write down what you did to get there. Of course, if you are planning on moving and want to know specifically what you should do, you can always contact us at Zablocki & Associates and we can help you figure it out. 

C. Zablocki