Hi there, I am getting conflicting messages about claiming moving expenses for someone who moved to Canada. Some say you can’t claim it because it is immigration others say if they are working here it can be claimed. Also if they came to Canada on a work permit, do they have to wait until they are permanent residents to claim the expense? I don’t see anything that would support this…
Next, if they qualify for the moving expense can I claim the mileage for their flights? ( they don’t have their tickets anymore and claiming mileage is less than they paid for their tickets) and can I claim the expense for 2019 even though they moved in 2017 and had taxable income in Canada in 2017?
Thank you so much in advance for your help.
From the Income Tax Act?
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The Income Tax Act only provides for moving expenses “…in respect of an ELIGIBLE RELOCATION.”
I’m not sure what would have made those “others say” that immigration to Canada is an ELIGIBLE RELOCATION, as it is not defined in the Income Tax Act to be one, so it seems that those “others” were likely just making unsupported guesses.
(It is specifically excluded by para (c ) of definition of eligible relocation).
A safe rule to follow to avoid problems is generally never to attempt any deduction unless you can specifically find it in the Income Tax Act…
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I asked the CRA about this several years ago as I had a client in this situation and they said if you are resident on both sides of the move then you can claim moving expenses. I thought this was terribly unfair for someone coming into the country after being a non-resident but they were adamant that this was the policy.
Its not “policy”… - It is LAW in the Income Tax Act, (definition of “eligible relocation”), and so the CRA has no power to change it…
One can always go to one’s own personal bank account, withdraw cash, and donate it as a gift to the new immigrant as a personal gesture if one feels like assisting the new immigrant…
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Thanks, I checked the moving expenses guide on CRA’s website, it is not very clear.
If you go by CRA’s ‘Answer a few questions…’ , it is clear that a non-resident cannot claim moving expenses, when moving to Canada. Here is the quote from CRA’s website: “you are a deemed or factual resident of Canada, and the move was from one place where you ordinarily resided to live in another place where you will ordinarily reside”-
There is no mention of a ‘non-resident’.
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Few Days Back, I confirmed with CRA, and they said NO
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“Few Days Back, I confirmed with CRA, and they said NO”
Always good to hear that a telephone CRA agent did not contradict the Income Tax Act… 
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While Section 62 permits the moving expenses, the definition of eligible relocation is located in 248 (as pointed out by @joe.justjoe1
To me, I find knowing the definition is a source of some comfort as there is an exception to the rule that both the old and new locations have to be in Canada, which is documented in paragraph © of the definition. (“except if the taxpayer is absent from but resident in Canada, both the old residence and the new residence are in Canada”.) On that point, I have challenged and won against the CRA for denial of a move from Indonesia to Canada for my client, where the client was a deemed resident of Canada while in Indonesia.
In the case provided here, an immigrant to Canada, the exception does not apply. But knowing that this exception is available is of interest when you deal with international tax issues.
If you’re deemed or factual resident of Canada and you’re moving to Canada, you can claim moving expenses. My client who first landed in Canada on July 2019 and opened his bank account, applied SIN, Dr license etc and left. Finally, he moved from his home country to Canada with family and had a job letter in Sep 2019. In this case, I think I can safely claim his moving expenses. The only thing to watch if he earned foreign income to report during Jul-Sep
@abdussammad “In this case, I think I can safely claim his moving expenses”
Its a free country, you are entitled to think as you please.
However, a taxpayer is not permitted in law to complete a tax return in any other way than is permitted by the Income Tax Act, so great care should always be taken.
What date did the taxpayer file his tax-emigration tax return to in his country of origin? Copy assessment? Tax treaty?
According to the posted information, the taxpayer did not move to Canada in September 2019, but rather he moved to Canada in July 2019, which would not have been an eligible relocation…
Vacation travels are seldom tax-deductible…
Has the taxpayer not become a factual resident when he landed in July and applied for all his docs? In the meantime, he got his job offer letter in Canada and left to wind up in his country to resume residency in Canada in Sep. Can he not allow to claim moving expense?
I would still discourage the taxpayer from attempting to commit possible tax evasion/fraud, whatever he says. Personally, I wouldn’t like the exposure as accessory to that.
How would he have landed and become (the non-existent) “factual resident” in July, without already moving? If he took 1 day, or 4 months to move all his stuff, who cares? He still is not permitted to engage in improper tax manipulation in Canada.
As to the exact commencement date of his tax-residency in Canada, you have not posted the relevant file details relating to tax-treaty and tax-emigration from his country of origin, so the precise legal status and exact dates of his tax-residency is unknown to forum readers…
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In reality, CRA is likely to jump immediately on such a S.62 immigration claim and to do a pre-processing review forthwith to disallow it, and not even wait for a post-processing review to catch it…
Moving expenses
Generally, you cannot deduct moving expenses incurred to move to Canada.
However, if you entered Canada to attend courses as a student in full-time attendance enrolled in a program at a post-secondary level at a university, college, or other educational institution, and you received a taxable Canadian scholarship, bursary, fellowship, or research grant to attend that educational institution, you may be eligible to deduct your moving expenses.
You cannot deduct moving expenses if your only income at the new location is scholarship, fellowship, or bursary income that is entirely exempt from tax.
For more information, go to Line 21900 – Moving expenses.
People could likely be misreading that, in the context of the guide in which it is placed.
In addition to what is mentioned, ALL of the conditions referenced on the Act must be met.
In your quote (from guide t4055), note the inclusion of the word “MAY”… .