Who can claim moving expenses?
If you moved to attend medical school as a full-time student, you may be able to claim your moving expenses as a deduction from your taxable income, reducing the amount of tax you owe.
In order to qualify, you must have moved to be at least 40 kilometers closer to your university, measured by travelling the most common public route — and you must “ordinarily reside” in the new location (that means you spend most of your time there).
Usually, in order to claim moving expenses, you must move from one location in Canada to another location in Canada. However, if you moved to a location outside Canada — for example, to attend med school in another country — you may still be able to claim moving expenses if you are a “factual resident of Canada.” A factual resident of Canada is someone who is attending school abroad but has kept residential ties to Canada. This includes things like your Canadian passport, a Canadian driver’s license, and Canadian bank accounts and credit cards.
What moving expenses can you claim for med school?
If you qualify to claim moving expenses, you may claim the costs you paid for moving yourself and your possessions. If you have family members who moved with you, such as a spouse or children, you can also claim their moving expenses, even if they didn’t move at the same time as you.
Keep in mind that the costs you claim must be “reasonable,” according to the Canada Revenue Agency. The types of moving expenses you can claim include:
- Transportation and storage costs, such as the cost of movers to pack, store, and deliver your belongings.
- Travel expenses during your move, including gas, meals, and accommodation for you and any members of your family who moved to your new location.
- Temporary living expenses, for up to 15 days, for meals and accommodation at either the old or new locations — or both — for you and any members of your family who moved.
- If you rented, the costs of cancelling the lease for your old home, but not rent for the months you were living there.
- If you owned your home, costs (up to $5,000) to maintain it if it’s vacant after you move and before you sell it. This category includes mortgage interest, property taxes, house insurance premiums, utility costs, and the costs of selling your old home and buying a new home (so long as you sold the old home due to your move).
- Incidental moving costs like changing your address on legal documents, replacing your driving licence, and paying for utility disconnections at the old location as well as hook-ups at the new location.
How do you claim moving expenses on your tax return?
If you’re eligible to claim moving expenses, you will need to complete the T1–M Moving Expenses Deduction included with your overall tax filing package. The form will require you to identify your old and new homes, the distance between them, the date and reasons for your move, and all of your eligible expenses.
Although you won’t need to include any additional information other than your completed T1–M form, you should hang onto all of your receipts in case the CRA asks you for more information to support your claim after filing your tax return.
For vehicle and meal expenses, you can either claim your actual costs or use a “simplified method” that provides a flat daily rate for meal expenses and a per-kilometre rate for vehicle expenses.
What if you don’t have much taxable income?
When you’re a student, you may not have much taxable income — meaning you may not be able to make use of much or even any of a possible deduction of moving expenses. For full-time students, you can only deduct moving expenses from scholarships, fellowships, bursaries, some prizes, and research grants that you’re required to report as part of your taxable income.
If you don’t have much or any taxable income and you have deductible moving expenses, you can “carry forward” those expenses to a future year when you have taxable income, and take the deduction then. However, you can only claim those expenses against the same type of scholarship, fellowship, bursary, prize, and grant income in a future year.
If you move in order to earn employment income — like a move for residency — you can claim the same kinds of moving expenses and deduct those expenses from your employment income.
If you’re a med student and wondering whether you qualify for a moving expense claim on your tax return, you might consider consulting with a tax professional. A professional can review your specific situation and help you determine what moving costs may be eligible.
Read related story: Tuition Tax Credits: What are They and How do They Work?
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