Lumpsum relocation expenses

Tax Topics
1

Hello Everyone

One of my client received lumpsum payment on account of relocation from Ontario to Alberta and this amount is not included in his T4.

My question is if I need to include that amount in income and claim the moving expenses or just leave that being a reimbursement of expenses, since this is not reported to CRA by the employer (being not on T4).

On his expense reimbursement report it is written that “payroll indicator G”, can anyone decode what this means.

2

If the new employer paid some of his moving expenses, that is not employment income. He would calculate moving expenses and deduct the amount that was reimbursed.

3

Hi Osiah

This is the new employer who paid lumpsum and not on per item basis. And the amount seems big. My concern is, since this is not reported to CRA, should I include this as employment income.

4

The person you should be asking is the taxpayer… If this was to pay for all of his moving expenses, then that is what it is.

If you feel uneasy, ask him to request some clarification from his employer in writing.

5

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/provided/moving-expenses-relocation-benefits/moving-expenses-paid-employer-that-a-taxable-benefit.html

1 Like
6

@cmjuneja.fca The amount will be big if he moved from Ontario to Alberta. However, as per what @snoplowguy posted, it is not employment income - it is reimbursement of moving expenses.

7

Also as per what @snoplowguy posted, it is employment income, and not a reimbursement of moving expenses:

"If you pay or reimburse moving costs that we do not list
above, the amounts are generally considered a taxable
benefit to the employee."

The term “lumpsum” would be a warning flag to me to dig deeper if it is not on a T4.

8

Weird - I just woke from a nap, but I can’t find this in @snoplowguy link.

9

@obhorst
snowplowguy’s link is an extract from T4130 - For the full text, refer to guide T4130

10

Thanks Joe. So you are suggesting that the reimbursement should list all the individual expense items that are being paid? We really can’t answer the question without the relevant detail However, we do know that a significant amount of moving expense reimbursed will be exempt so the poster should not do anything without more information than what we can give him here.

11

enlightened from enlightened guys views, really, appreciate the views

theoratically @snowplowguy, you are correct

but what was concerning me, the word “lumpsum”, @joe is right in flagging that

for sure more clarification is needed from the employer side.

my broader view is since it is not on T4 and the employer’s note says “employee expense details report”, so should leave it to …