If you moved this year, you may be entitled to write off your moving expenses on your tax return, provided the distance between your old residence and your “new work location” is at least 40 kilometres greater than the distance between your new residence and the new work location.
The Canada Revenue Agency released two technical interpretations this month on the topic of moving expenses that may apply to you.
The first dealt with a situation in which the taxpayer completed a full-time employment contract with her employer which was subsequently renewed. During the renewal contract, she was offered a permanent position for the same job which she accepted and then relocated 40 kilometres closer to her employer’s work place. That being said, the taxpayer’s place of work, working conditions and employment duties did not change.
The CRA responded that in order to deduct moving expenses, your move must meet the definition of an “eligible relocation” which includes “a relocation that occurs to enable the taxpayer to… to be employed at a new work location.”
While the Tax Act does use the term “new work location,” prior jurisprudence has found that such a place does not necessarily have to be “new” and that in some situations, a employee can have an eligible relocation without changing his or her employer or work location. For example, an employee who relocates to assume new job responsibilities which he or she would have been unable to assume if it were not for the relocation may be able to deduct moving expenses.
Since, in the current situation, the move “did not occur to enable the taxpayer to be employed at a new work location for purposes of the moving expense deduction,” the CRA concluded that the deduction would likely not be available.
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