Moving Expenses: Can one claim when they relocate to SEEK work?
I recently got laid off and I've decided to move to another province (Alberta) to seek work. I'm trying to determine whether or not I'll be able to claim my trip across the country and it would really affect how I travel - currently I'm being frugal and plan to tent across the country; but if I am confident I can claim the move perhaps I'd treat myself to a couple of hotels along the way.
CRA's website, as well as most blogs and new articles, state the 40KM limit over and over - that part is no problem. But CRA's website seems to imply that you have a job lined up BEFORE you go.
They also say that one can't claim job hunting trips; but to me, a job hunting trip would be a return trip to a new city where you have an interview for a position and obviously this isn't covered.
So, in short, my situation: I plan to relocate. I'm confident I'll find work, but I may spend 2 months looking. It's just not reasonable to line up the job from the other side of the country.
My question: Should I (Can I) claim expenses for this trip?
You do not have to have a job lined up before you go. Keep EVERY receipt that you wish to claim...gas, accomodation, oil change on car, meals, temp. accomodation once you get to where you are going.
Keep in mind that you deduct the total of these items from the taxable income earned at your new job and NOT from your income tax payable (so what you actually save in tax depends upon your tax rate). There is a big difference. You can also carry forward into the following year and portion of your expenses that exceed the amount earned in the year at your new job location.
Alberta is a wonderful place to work and live. \Good luck with the move and finding employment opportunities.
By default you can claim your "moving expenses" against income earned at the job in the new location. (I'm not sure if there is a maximum time after which the expenses are not longer claimable - I'll look around on the CRA site). So whether you moved with a job in hand, or moved and then found a job - these become moving expenses, which you can deduct. Make sense?
When I sold my home in the GTA and moved to BC, they disallowed my claim because too much time had passed. They will scrutinize carefully. The problem was that it took a couple of years to get enough income to make it worth it. So I would suggest leaving the sale until you have a job nailed down. This will make the claim more solid.
Also some companies will help with the move. Don't make it a condition but just inquire what their policy is. Because the CRA will ask those questions.
Looks like you must claim expenses in the year of the move, or, at most, in the year following the year of the move. So, in reading that (see section 3) - you need to find employment within one year of moving. This seems fair enough.
In early 2010 I bought a property in a desirable location and rented it out. Later that year, I received a job offer there. The move did not take place till 2011. I was able to claim moving costs including real estate fees for the sale of the previous residence and closing costs on the purchase of the new one.
As an aside, there's a simplified method for claiming moving expenses based on kilometers traveled and daily allowances for the likes of meals.
You *may* find that the simplified method would allow you to make a higher claim. Run the numbers.
I used that method on my last move and, while I was asked for supporting documents, a Google map printout showing my route and a letter of explanation was entirely okay by CRA. I'm sure they just wanted something to drop in a filing cabinet.
Moneygal - It was the wording in this interpretation bulletin that prompted my initial question; it starts with "Taxpayers moving to start a job or business...", which technically doesn't apply to me. I'm moving to look for work, with 100% confidence that I will find work.
I'm glad to hear that most people agree that I can claim this move and that complications should be minimized as long as I make the claim before the tax year is out. I'm pretty confident I'll find something within a couple of months so that's fine.
So glad that I got with the program (financially speaking) and had a healthy emergency fund in place!
I will definitely keep all receipts; hopefully don't get questioned about it or audited. I plan to do things by the book but would rather avoid the hastle.