Taking a new job sometimes means changing cities. Part of the moving bill can then be subtracted from your taxable income — but a single condition rules out most claims, and it is measured in kilometres.
The 40 km rule, in plain words
The Canada Revenue Agency sets one hard number: your new home must be at least 40 kilometres closer to your new work location than your old one. What counts is not how far you moved, but how much closer you ended up.
Two examples to anchor the idea.
- You lived 60 km from your new office and you move to 15 km away: you got 45 km closer, so the condition is met.
- You lived 50 km away and you move to 20 km away: you only got 30 km closer, and the deduction is gone — even if the truck drove all day.
One detail trips up a lot of people: the distance is measured by the shortest public route, not as the crow flies on a map.
Who can claim it
Two profiles, and they do not deduct from the same income.
- Employees and self-employed people who moved to work or run a business at a new location. They subtract their costs from the employment or business income earned at that new location.
- Full-time students enrolled in a post-secondary program. They can only deduct these costs from the taxable part of their scholarships, bursaries or research grants.
In both cases, the costs cannot be subtracted from just any income: not from investment income, and not from EI benefits.
Two situations block the deduction even when the kilometres line up. If your employer reimbursed the move and that reimbursement was not added to your income, there is nothing to deduct: you did not bear the expense. And if you did not keep your supporting documents, the CRA can deny the claim — receipts are not filed with the return, but they must be available on request.
A word on scope: this article covers a move from one place to another within Canada. Different rules apply to a move from or to another country. And if the new address also means a new province, your retirement contributions change plans — that is another subject, covered in QPP or CPP when you change provinces.
Which costs qualify, and which do not
| Eligible | Not eligible |
|---|---|
| Transportation and storage of household goods: packing, hauling, movers, in-transit storage, insurance | Work done to make the old home more saleable |
| Travel to the new home: vehicle, meals and lodging on the way | Any loss on the sale of the old home |
| Temporary living costs near the old or new home, for 15 days at most | House-hunting trips before the move |
| Cancelling the lease on the old home, excluding rent paid before the cancellation | Trips to look for work in another city |
| Incidental costs: address changes on legal documents, replacing the driver's licence, connecting and disconnecting utilities | Items movers refuse to take: plants, frozen food, paint, cleaning products |
| Keeping the old home while it sits vacant during sale efforts — interest, property taxes, insurance, heating | Cleaning or repairing a rented home to meet the landlord's standards |
| Selling the old home: advertising, notary or legal fees, real estate commission, mortgage penalty | Replacing personal-use items: drapes, carpets, tool sheds, firewood |
| Buying the new home, if the old one was sold because of the move | Mail forwarding and mortgage default insurance |
Two caps are worth remembering. Temporary living costs stop at 15 days. And keeping the old house while it sits empty during sale efforts is capped at $5,000. Those are the two lines where the bill climbs fastest.
It all gets calculated on Form T1-M, Moving Expenses Deduction: one form per eligible move, and the result carries over to line 21900 of the federal return.
Meals and kilometres: the simplified method
For the meals and the vehicle on the trip, the CRA lets you choose between two methods. The detailed method: you add up your receipts. The simplified method: you apply a flat rate, with no receipts to keep for those two items.
Here are the simplified-method rates published for the 2025 tax year, the most recent ones the CRA has posted.
- Meals: $23 per meal, up to a maximum of $69 per day per person, sales tax included.
- Vehicle: 60.5 cents per kilometre for a trip that started in Quebec. The rate differs from province to province, and the one that applies is the province where the trip began.
A round-number illustration: 500 km driven starting from Quebec works out to $302.50 of vehicle costs, without a single gas receipt to produce.
What the deduction is actually worth
This is the most misunderstood part, and it changes the size of the prize. A deduction is not a refund. It subtracts an amount from your taxable income, and what you save is the tax that amount would have paid.
That percentage has a name: the marginal rate. It is the tax rate that hits your last dollar earned, the rate of the income bracket you sit in — not the average across your whole salary. The difference between the two is spelled out in marginal rate and average rate.
Take a $70,000 salary in Quebec. Two taxes stack up on that last dollar. First the federal tax, which Quebec residents pay reduced by 16.5% — that is the Quebec abatement, a rebate that offsets the programs the province runs itself. Then Quebec's own tax, on its own brackets. Put end to end, the marginal rate comes to 36.1% according to the Salarium calculator.
The direct consequence: at that salary, $5,000 of deductible moving expenses saves roughly $1,806 in tax. Not $5,000.
Here is where the money actually goes on that salary, before any deduction.
| What gets withheld | Annual gross | Share of gross |
|---|---|---|
| Federal tax | −$6,253 | 8.9% |
| Provincial tax | −$7,175 | 10.3% |
| QPP | −$4,190 | 6.0% |
| Employment Insurance | −$896 | 1.3% |
| QPIP | −$301 | 0.4% |
| Total withheld | −$18,815 | 26.9% |
| Annual net | $51,185 | 73.1% |
To get the figure for your own salary rather than for $70,000, the Quebec calculator shows the marginal rate alongside the net.
If the costs exceed the income from the new city
The deduction cannot exceed the income earned at the new location during the year. A move in November, two months of salary in the new job and $9,000 of costs: the whole amount will not go through that year.
Nothing is lost, though. The unused part carries forward to a future year and is then deducted from the same kind of income earned at the new location. The carry-forward only goes forward: you cannot reach back into a year already filed.
Three reflexes before filling out the form
- Measure before you spend. The 40 km rule takes a few minutes to check on a road map. If you only got 38 km closer, nothing above applies.
- Keep everything. Mover's contract, gas receipts, hotel nights, notary fees, mortgage penalty. Receipts do not go with the return, but the CRA can ask for them much later.
- Look at how your employer handled the reimbursement. If it shows up as taxable income on your pay stub, the matching costs stay deductible. If it does not, they are not.
Frequently asked questions
Do you have to move more than 40 km to claim moving expenses?
No — what counts is not the distance travelled. The Canada Revenue Agency rule is that your new home must be at least 40 kilometres closer to your new work location or school than your old home was. A 300 km move that brings you only 20 km closer gives no deduction; a 45 km move that brings you 45 km closer does.
How is the 40 km distance measured?
By the shortest public route, not as the crow flies. You compare two trips: from the old home to the new work location, and from the new home to that same work location. The difference between the two must be at least 40 kilometres.
Can you claim moving expenses your employer reimbursed?
Only if the reimbursement was added to your taxable income. If it shows up as income on your pay stub, the matching costs remain deductible. If it appears nowhere in your income, you did not bear the expense and you cannot deduct anything.
How much is a moving expenses deduction actually worth?
A deduction does not refund what you spent: it lowers your taxable income, and you save the tax that amount would have paid, at your marginal rate. On a $70,000 salary in Quebec the combined marginal rate is about 36.1%, so $5,000 of deductible costs is worth roughly $1,806 less tax.
What happens if the costs exceed the income earned at the new location?
The deduction is capped at the income earned at the new location during the year. The unused part is not lost: it carries forward to a future year and is then deducted from the same kind of income earned at that new location. The carry-forward only works forward, never into a year already filed.
Which form do you need to fill out?
Form T1-M, Moving Expenses Deduction, from the Canada Revenue Agency. You need a separate form for each eligible move, and the result carries over to line 21900 of the federal return. Receipts are not attached to the return, but they must be kept and provided on request.