When moving expenses can be deducted

A move across the country for a new job can cost thousands of dollars before the first paycheque arrives: movers, a long drive, nights in motels, a few weeks of temporary rent, a penalty for breaking the old lease. Most people file those receipts under “the price of the job”. If the move meets a distance test, a good part of that price can be deducted.

The rules are generous in what they cover and strict about when they apply. Here is how the deduction works on the 2026 return.

The receipts from a move

Moving expenses are claimed on line 21900 of the return, using Form T1-M, Moving Expenses Deduction, one for each eligible move. It is a deduction, not a credit: it reduces taxable income, so it saves tax at your marginal rate, as explained in our file on 2026 brackets. You do not send receipts with the return, but you must keep them in case the CRA asks.

Who can claim

According to the CRA, you can claim eligible moving expenses if you moved to a new home to work or to run a business at a new location, or to study full-time in a program at a post-secondary level. People who move for a new job with the same employer qualify as well as people changing employers. Moving for other reasons, such as to be nearer family or to a cheaper area, does not qualify, however long the distance.

The 40-kilometre test

Your new home must be at least 40 kilometres closer to your new work location or school than your old home was, measured by the shortest public route, not as the crow flies. The test compares two distances: from the old home to the new work, and from the new home to the new work. The difference must be at least 40 km.

A move within the same city to cut a commute from 35 km to 5 km would not pass, even though it is a real move for work: it is only 30 km closer.

What counts

The CRA lists these eligible expenses:

• transportation and storage costs for household items, such as movers and packing;
• travel costs, including vehicle expenses, meals and lodging, for you and your household on the way to the new home;
• temporary living expenses near the new or old home for up to 15 days;
• the cost of cancelling the lease on the old home;
• the costs of selling the old home, such as advertising, legal or notary fees and real estate commission;
• legal or notary fees for buying the new home, if the old home was sold because of the move;
• incidental costs, such as changing your address on legal documents;
• costs of maintaining the vacant old home while making reasonable efforts to sell it, up to $5,000.

What does not

The CRA lists, among others, travel for house-hunting trips before the move, any loss on the sale of the old home, work to make the old home more saleable, and mortgage default insurance. If your employer reimbursed you, you can only claim to the extent that the reimbursement is included in your income, or you must reduce your claim by the amount received.

One move, worked through

An employee moves 600 km in August 2026 for a new job. The move passes the 40 km test. Their receipts:

Only against income from the new location

This is the rule that most often limits a claim. Employed and self-employed people can deduct moving expenses only from the employment or self-employment income earned at the new location. Full-time students can deduct them only from scholarships, bursaries, fellowships, research grants and prizes that must be included in income.

In the example, suppose the new job pays $22,000 from September to December 2026. The full $7,350 can be deducted on the 2026 return. If instead the job started in December and paid only $5,000 in 2026, the deduction for 2026 would be limited to $5,000, and the remaining $2,350 would be carried forward and deducted in 2027 against income from the same new location. The CRA does not allow moving expenses to be carried back to an earlier year.

The saving appears as a lower tax bill on the return, often as a refund, which is not the same thing as paying less tax overall, as our file on refunds explains.

Simplified or detailed: meals and driving

For meals and vehicle costs, the CRA offers two methods. The detailed method claims actual amounts and needs every receipt and a record of kilometres. The simplified method uses a flat rate per person per meal and a cents-per-kilometre rate for the province or territory where the trip began, multiplied by the distance driven; it needs a record of the trip but not every receipt. Other expenses, such as movers and lease penalties, always need receipts.

What to check

If the new job also means working from home, see what employees can still deduct for a home office; if the move is towards buying a first home, see how the First Home Savings Account works.

SOURCES ON FILE

1. Canada Revenue Agency — Line 21900, Moving expenses — who can claim, the 40 km test, eligible and ineligible expenses, carry-forward, methods and Form T1-M.
2. Canada Revenue Agency — Current year tax rates and income brackets (2026) — the marginal rates at which a deduction saves tax.

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