Tax season is upon us Canadians! While you’re getting your tax information ready, it’s important to know what you can claim and what you can’t on your 2021 tax return. If you moved in 2021, you’re not alone! Over 4 million Canadians decide to relocate their homes every year for a variety of reasons. Whether you’re moving to a new city or a new province, moving expenses can add up. With tax season around the corner, we’re sharing what moving expenses you can claim on your 2021 tax return.
Did You Know That You Can Claim Moving Expenses on Your Tax Returns?
Depending on a variety of factors, eligible Canadians can claim their moving expenses on their annual tax returns. In this article, we’ll cover who is eligible, which expenses you can claim, and the 2021 tax return deadline.
Who Is Eligible to Claim Moving Expenses on Tax Returns?
Moving expenses can be claimed on your 2021 tax returns; however, you must meet certain criteria to be eligible. To claim moving expenses on your taxes, the purpose of your move must be for work or school.
Moving for Work
Did you relocate your home in 2021 for work-related reasons? To claim your moving expenses on your taxes, you must fall into one of the following criteria:
- You are an employee or are self-employed who moved within Canada
- Moved during the year and established a new home to start a new job or business
- You earn employment income or self-employed income at your new residence
- Your new home is at least 40 kilometres closer to your new place of work or business than your previous home was
Another important thing to note is that if you are an employee who received a moving expense reimbursement from your employer, you’ll need to disclose that on your tax forms.
Moving for School
If you are a Canadian student who relocated for study purposes, you might be eligible to claim your moving expenses on your taxes. To qualify, you must meet the following criteria:
- Are a student who moved to attend a post-secondary program at a university, college, or other educational institution
- Are a full-time student
- Received an amount from a scholarship, bursary, fellowship, or research grant in the year which was required to be included in your income
- Your new home is at least 40 kilometres closer to your new educational institution than your previous home was
The criteria above apply to students who are studying in Canada or abroad and have established a new primary residence. This means that students must have either sold or stopped renting their previous place of residence and are living in a new home. Those who keep their primary residence and move to a new temporary home to study are not eligible to deduct moving expenses from their taxes.
If you are still unsure about your eligibility, this quiz can help you determine if you can claim your moving expenses.
What Moving Expenses Can I Deduct?
Once you’ve determined that you qualify, you can claim most amounts that you paid for moving yourself, your family, and your belongings. Not all household members have to travel together or at the same time. The following expenses are eligible to be claimed:
- Transportation and storage costs
- Travel expenses
- Temporary living expenses for a maximum of 15 days
- Cost of cancelling your lease for your old home
- Incidental costs related to your move, which include:
- Changing your address on legal documents
- Replacing driver’s licenses and non-commercial vehicle permits (does not include insurance)
- Utility hook-ups and disconnections
- Costs to maintain your old home when vacant up to a maximum of $5,000 after you moved, and during a period when reasonable efforts were made to sell the home. These costs include interest, property taxes, insurance premiums, cost of heating, and utility expenses.
- Costs of selling the old home
- Cost of buying the new home, which includes:
- Legal or notary fees you paid to buy your new home
- Taxes paid other than GST/HST for the transfer or registration of the title to the new home
For additional information related to eligible moving expenses, visit “Line 21900 – Moving Expenses”.
How To Claim Your Moving Expenses on Your Tax Return
To claim your moving expenses on your 2021 tax return, you’ll need to use form T1-M to calculate your moving expenses. Once calculated, you can claim your expenses on line 21900 of your T1 return. You do not need to include the T1-M form in your return or attach any receipts; however, you must keep these documents and receipts on hand if the Canadian Revenue Agency requests support documentation for your claim.
The deadline to file your taxes is Wednesday, April 30, 2022, for individuals. For those who are self-employed, the last day to file is Wednesday, June 15, 2022. This deadline also applies to spouses of self-employed individuals.
Moving in Windsor-Essex
Thank you to all our clients who choose to move with The Move Out Bin in 2021! We are happy to have served the residents of Windsor-Essex since 2018 and look forward to many more years of business. For all your moving needs in 2022, count on The Move Out Bin to help make your move easy, affordable, and stress-free. To get an instant quote on your upcoming move to Windsor-Essex or the surrounding area, click here. We look forward to providing you with simplified moving and storage solutions.