Moving Expenses Tax Deduction Canada 2026 | Form T1-M

Q: The 40km Rule — Do You Qualify?

To deduct moving expenses, your new home must be at least 40 kilometres closer (measured by the shortest normal route) to your new work location or school than your old home was. This is the key eligibility test — distance is measured by road, not straight line.

Did you move in 2025 to start a new job, run a business from a new location, or attend a post-secondary institution full-time? If so, you may be able to deduct your moving expenses on your Canadian tax return. The moving expense deduction is one of the most overlooked deductions available — and for long-distance moves, it can easily add up to thousands of dollars.

The 40km Rule — Do You Qualify?

To deduct moving expenses, your new home must be at least 40 kilometres closer (measured by the shortest normal route) to your new work location or school than your old home was. This is the key eligibility test — distance is measured by road, not straight line.

Example: If your old home was 50km from your new office and your new home is 5km from that office, the difference is 45km — you qualify. If your old home was 50km away and your new home is 15km away, the difference is only 35km — you do not qualify.

Who qualifies: Employees who moved for a new job, self-employed individuals who moved to be closer to their business location, and full-time post-secondary students who moved to attend school. You must have moved within Canada (moving to or from Canada has different rules).

Eligible Moving Expenses

The CRA allows a wide range of moving-related costs. Keep all receipts — the CRA may request them during a review.

Transportation and Storage

Moving company charges (truck rental, professional movers)
Packing materials (boxes, tape, padding)
Storage costs for up to 90 days if your new home isn't ready
Vehicle costs for driving your own vehicle (actual expenses or CRA per-km rate)
Airfare or train tickets for household members
Hotel/motel accommodation during the move
Meals during travel (simplified method: $23/meal up to 3 meals/day)

New Home Costs

Lease cancellation costs at your old home
Legal/notary fees for buying or selling a home due to the move
Real estate commissions on the sale of your old home
Costs to maintain a vacant old home (up to $5,000 maximum) — mortgage interest, property taxes, insurance, heat/hydro while it's listed for sale and you've moved
Utility hook-up fees at your new home
Land transfer tax and title insurance on your new home purchase

Incidental Costs

Changing address on legal documents
Replacing driver's licence and vehicle registration for new province
Connecting/disconnecting utilities

What Is NOT Deductible

House hunting trips before the move
Home improvements or repairs to make old home more saleable
Cost of cleaning old home
Loss on sale of old home
Mail forwarding charges
Losses on non-transferable memberships or subscriptions

Deduction Limit — Income from New Location

Moving expenses can only be deducted against income earned at your new location in the year of the move. If your moving expenses exceed the income earned at the new location in the year of the move, you can carry forward the excess to the following year(s) to be applied against income from the new location.

For students, moving expenses can only be deducted against scholarship, bursary, or research grant income received at the new location — not employment income earned during the school year.

Moving Expense Calculator

Estimate Your Moving Expense Deduction

Moving company / truck rental ($)

Storage costs ($)

Travel (hotels, meals, transport) ($)

Legal/real estate fees ($)

Vacant old home costs (max $5,000) ($)

Other eligible expenses ($)

Income earned at new location in move year ($)

Your marginal tax rate (%)

Total eligible moving expenses:

Deductible this year (limited to new-location income):

Carryforward to next year:

Estimated tax savings:

How to Claim — Form T1-M

Complete Form T1-M (Moving Expenses Deduction) and attach it to your T1 return (or enter the amounts in your tax software — it generates the form automatically). The deduction is entered on Line 21900 of your T1. You don't need to submit receipts with your return, but keep them for at least 6 years in case the CRA requests them.

Employer reimbursements: If your employer reimbursed some of your moving expenses, you can only deduct the unreimbursed portion. If you received a reimbursement for non-eligible expenses, that reimbursement may be a taxable employment benefit.

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