Canada allows you to deduct eligible moving expenses from your taxable income when you move for work, self-employment, or full-time post-secondary education — provided your new home is at least 40 km closer to the new work or school location. This deduction (line 21900 on your T1 return) is often missed by Canadians who relocate for a new job, not realising that a wide range of moving costs — from truck rentals and temporary housing to real estate fees for selling the old home — are eligible.
Quick answer: Canadian moving expense deduction (line 21900): must move 40+ km closer to new work or school. Eligible costs include moving truck, travel, temporary housing (up to 15 days), old home selling costs, and new home legal fees. Cannot exceed income earned at new location — excess carries forward. File Form T1-M with your T1 return. Keep all receipts.
The 40 km Distance Test
The fundamental eligibility requirement: your new home must be at least 40 km closer to your new workplace or educational institution than your old home was.
Calculation:
| Distance Measurement | Example |
|---|---|
| Old home to new workplace | 75 km |
| New home to new workplace | 12 km |
| Distance closer: 75 − 12 | 63 km — qualifies (over 40 km) |
The distance is measured by the shortest normal route — typically by road. CRA uses road distance, not as-the-crow-flies distance. If your old home was 75 km from work by road but only 50 km by a highway shortcut, use the shorter road route.
Note: The 40 km test compares both homes to the same new work location. Moving 200 km across the country clearly qualifies. Moving 15 km across a city may or may not qualify depending on your specific situation.
Who Qualifies
- Employees: Moving to a new employer or a new office/work location of the same employer
- Self-employed persons: Moving to establish a new business or relocate an existing business to a new location
- Full-time students: Moving to attend a Canadian university, college, or other designated educational institution (deducted against taxable scholarship/bursary income, not regular employment income)
- Returning students: Moving back after a work term, co-op placement, or graduation — if moving to a new work location
What You Can Deduct: Eligible Moving Expenses
Transportation and household goods:
- Costs to move furniture, appliances, and personal effects (truck rental, moving company, packing materials)
- Storage costs while in transit (up to 30 days)
Travel expenses:
- Vehicle costs (actual gas and oil, or CRA’s simplified flat rate)
- Airfare, train, or bus tickets for you and your household members
- Meals en route (flat rate: $23/meal to a max of $69/day per person, or actual costs with receipts)
- Hotel/motel costs during travel
Temporary housing:
- Hotel or motel near your old home or new home: up to 15 days of reasonable temporary accommodation
Costs related to the old home:
- Lease cancellation penalty
- Real estate commission (if you sold the old home)
- Legal fees for selling the old home
- Mortgage penalty for breaking the mortgage early (if required to sell)
- Utility connection/disconnection costs
Costs related to the new home:
- Legal fees for purchasing the new home
- Land transfer taxes (provincial)
- Home inspection costs
Not deductible:
- Purchase price of the new home or improvements to it
- Home renovations or cleaning before moving
- Mail forwarding costs
- Expenses paid by your employer (employer reimbursements reduce your deductible amount)
- Job-search costs (travel to interviews, resume costs — these are not moving expenses)
Income Limitation and Carryforward
Moving expenses can only reduce income earned at the new location:
| Type of Move | Income to Deduct Against |
|---|---|
| Move for employment | Employment income from the new job at the new location |
| Move for self-employment | Business income earned at the new location |
| Move for school | Taxable scholarship, fellowship, or bursary income at the new school |
Carryforward: If your moving expenses exceed the income earned at the new location in the year of the move, the unused portion carries forward to the following year — where it can be deducted against income from the same new location.
Example:
You move from Toronto to Vancouver for a new job starting October 2026. You have $15,000 in eligible moving expenses. Your income from the new job in 2026 (October–December only) is $25,000.
- Maximum deduction: $15,000 (less than income from new location)
- Full $15,000 claimed on line 21900 in 2026
Alternatively: If you started January 2026 but had $20,000 in moving expenses and only $16,000 of new income:
- 2026 deduction: $16,000 (capped at income from new location)
- Carryforward: $4,000 to 2027
Employer Reimbursements
If your employer reimburses you for moving expenses, you must reduce your deductible moving expenses by the amount reimbursed. The reimbursement itself may or may not be a taxable employment benefit — check with your employer and CRA guidelines.
If your employer provides a flat relocation allowance (not tied to specific expenses), that amount is generally taxable income. You can then claim actual eligible moving expenses against that income.
Claiming on Form T1-M
- Gather receipts for all eligible expenses
- Complete Form T1-M — Moving Expenses Deduction
- Transfer the final amount to line 21900 of your T1 personal income tax return
- Keep all receipts — CRA may request them; do not submit receipts with your return (unless CRA asks)
CRA audits moving expense claims periodically, particularly for large claims or for moves that appear to be personal (e.g., moving to a bigger city without a clear new job or school).
Related Canadian Tax Resources
- Self-Employment Tax Deductions Canada — allowable business expenses for self-employed Canadians
- T1 General Return Guide — completing your Canadian tax return
- CRA Deductions and Credits Hub — all Canadian tax deduction guides for 2026
Moving for work is expensive. The CRA moving expense deduction — often $10,000 to $30,000 for long-distance relocations — can meaningfully reduce your tax bill in the year of the move. Document every expense and keep receipts for at least 6 years in case of audit.
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