In order to be tax deductible, moving costs must be incurred in specific and relatively narrow circumstances. Our tax system allows taxpayers to claim a deduction only where:
The move is made to get the taxpayer at least 40 km closer to his or her new place of work, whether that work is a transfer, a new job, or self-employment. ie) From Ottawa to Toronto.
Students who are moving to take a summer job (even if that move is back to the family home) can also make a claim for moving expenses where that move meets the 40-kilometre requirement.
Even where the 40-kilometre requirement is met, it is possible to deduct moving costs only from employment or self-employment (business) income earned at the new location — there is no deduction possible from other types of income, like investment income or employment insurance benefits.
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