- To deduct moving expenses, you generally need to satisfy both of the following: 1.
- Commonly eligible costs include: - Transportation and storage costs for household belongings - Travel expenses for you and your household during the move - Temporary living expenses near…
- Moving expenses can only be deducted against income you earn at your new work location — or, for students, against specific types of income like scholarships and research grants — not…
Relocating for a new job, a transferred position, or full-time studies can be expensive, and the moving expenses tax deduction exists to offset some of that cost. But the eligibility test is stricter than most people assume — simply moving to a nicer neighbourhood closer to your existing office doesn't automatically qualify, and the deduction is capped by the income you earn at the new location.
Getting the eligibility test wrong is a common reason the CRA adjusts a claimed moving expense deduction, so it's worth understanding both conditions before you file.
This guide walks through the two-part eligibility test, what expenses typically qualify, and the income limitation that catches people off guard.
The Two-Part Eligibility Test
To deduct moving expenses, you generally need to satisfy both of the following:
- A qualifying reason for the move. You moved to start a new job, run a business, or attend a post-secondary institution as a full-time student.
- A meaningful distance test. Your new home needs to be significantly closer to your new work, business, or school location than your old home was. The CRA applies a specific minimum-distance test to determine this — verify the current distance requirement before relying on it, since even a move that feels closer in practice may not meet the technical test.
Both conditions need to be met. A move for the right reason that doesn't satisfy the distance test won't qualify, and a move that satisfies the distance test but wasn't for a qualifying reason won't qualify either.
What Counts as an Eligible Moving Expense
Commonly eligible costs include:
- Transportation and storage costs for household belongings
- Travel expenses for you and your household during the move
- Temporary living expenses near the old or new home, for a limited period
- Costs of cancelling a lease on your old home
- Legal fees and related costs on the sale of your old home and the purchase of a new one, and certain costs of maintaining the old home while it's vacant and up for sale
If your move involves both selling and buying property, the real estate and legal side of that transaction is worth coordinating early — our Real Estate team handles closings across Ontario.
The Income Limitation: You Can Only Deduct Against Income at the New Location
This is where the deduction most often gets misunderstood. Moving expenses can only be deducted against income you earn at your new work location — or, for students, against specific types of income like scholarships and research grants — not against your income generally. If your eligible moving expenses exceed what you earned at the new location in that year, the unused portion generally carries forward to be applied against future income from that same new work or business.
Students Have a Narrower Version of the Same Rule
A full-time post-secondary student who moves to attend school can also claim eligible moving expenses, but only against certain scholarship, fellowship, bursary, or research grant income received in connection with the studies — not against employment income generally. This narrower application catches many students off guard when they assume the deduction works the same way it does for someone moving for a job.
Documentation to Keep
- [ ] Receipts for every moving-related expense claimed
- [ ] Proof of your old and new addresses and the dates of the move
- [ ] Evidence supporting the qualifying reason — a new employment offer letter, business registration, or school enrollment confirmation
- [ ] Records showing income earned at the new location, to support the amount claimed against the income limitation
Frequently asked questions
Can I deduct moving expenses if I moved for a better apartment but didn't change jobs?
No — without a qualifying reason, such as a new job, business, or full-time studies, tied to the move, the deduction doesn't apply regardless of the distance involved.
What if my employer reimburses some of my moving costs?
You can generally only deduct the portion of eligible expenses that wasn't reimbursed by your employer, and any reimbursement itself may have its own tax treatment. Keep clear records of what was and wasn't reimbursed.
Does the distance test look at driving distance or straight-line distance?
The CRA's test uses a specific measurement method that isn't simply "however far it feels" — confirm the current methodology before assuming your move qualifies based on driving time or road distance alone.
If my moving expenses are more than I earned at my new job this year, do I lose the excess?
No, generally you don't lose it — unused eligible moving expenses can typically be carried forward and deducted against future income from the same new work location or business.
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Start a file online — flat, published fees, reviewed by a licensed Ontario lawyer before a dollar is owed.