Moving Expenses to Work from Home In Required Area

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CAN A CLIENT CLAIM MOVING EXPENSES IF THEY ENTER A PARTNERSHIP AGREEMENT WITH SAME COMPANY (100% commission) TO MOVE TO TOWN WHERE CLIENTS ARE AND WORK FROM HOME OFFICE (New home is 45km from old home)?

Facts:
-Previous residence (in Town A) was 42.0km from office, which is in a different town (Town B). -During COVID, they began working from home 100%. -In 2021, they signed a partnership agreement (still working for same company and office but under a different arrangement) and went from earning a combination of salary and commission to earning 100% commission in a partnership agreement to service clients in the area around the original office location (Town B).

  • They moved family to Town B, as this was an important part of the partnership agreement; the partner is letting them take over his book of business assuming that my client will move to the area and be involved in the community (which is important to the business clients in Town B).
  • Technically my client moved 45km from old home to new home to get a home in the necessary area and works from home now (distance from new residence to “new” work location is 0km, which I’m wondering if that will cause a red flag).
  • The distance from the client’s new home to the original office is only 36.7 shorter so doesn’t meet the 40km requirements, but since they’re working 100% from home now and had to move to the area as part of the job, they went from a 42km commute (old home to office) to a 0km commute when working from the new home in Town B.

Thank you in advance!!

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The requirement is 40 km closer to their place of work. So, if the home office is the “new workplace”, and the old home was 42 km away from the “new workplace”, it should qualify. Distance from new home to new workplace = 0 km shouldn’t be a red flag, but CRA follows up on a large percentage of moving expense claims regardless of distance. They may question it, so be prepared to defend your rationale (or more precisely, ensure your client is able to defend “their” rationale).

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Thank you for taking the time to respond!

The reason for them moving to the new town seems more legitimate to me than some other moving claims I’ve seen, it’s just the km distance is so close to not making it and the work from home situation made it seem a little bit questionable to me if it would be allowable.

Appreciate the input!

Thanks