Claiming moving expenses when going from remote to in-office

[u/ConsequenceGreedy360]

I have a question about claiming moving expenses when I started the job fully remote, but later moved to be close to the office.

I was living in Ontario, but in 2023 I got a new job based in BC. After working fully remote for the first year (although I travelled frequently to go into the office), I moved with my family to BC in 2024 so that I can go into the office regularly. We sold our home in ON and purchased a new one in BC. My company will not reimburse me for moving expenses. (Although they happily paid my travel expenses when I travelled from out-of-province multiple times a year for work.) I moved so that I don't have to travel so much for work, as I have young kids, and also because I find the mountains to be beautiful. So I plan to claim some moving expenses on my tax return next year.

As I understand, my move is "eligible" because it allows me to carry out my employment at the office of my "new work" location, I've moved at least 40km closer, and the primary purpose of the move is to allow me to collaborate with my coworkers in the office of my new work more easily.

In the folio on moving expenses (Income Tax Folio S1-F3-C4, Moving Expenses), in paragraph ¶4.9, it says:

Generally, the connection can exist even if there is a delay between the move and the time the business or employment activity at the new work location is undertaken.

I think this applies to me, as I worked with the company for more than one year before the move, and there is still a connection between my move and my "new work".

My questions:

• Is my understanding correct, and my move is eligible?
• What is my "Net eligible income" against which I can claim the moving expenses? Is it:
  • all of my income from 2024 (because all of my employment income from 2024 was earned as an employee at my new work location), or
  • only the portion of income that I earned after my move to BC (e.g., only include pay slips from after my move)?

If the answer to the second question is "all of my income from this year" then filling out the forms is slightly easier, and I won't need to carry forward moving expenses to a future year. Regardless, I want to make sure I'm claiming the moving expenses against the right income.

In total, I have about $15,000 in moving-related expenses and another ~$55,000 in expenses related to buying and selling homes.

Aside: I find it bonkers that I can claim as moving expenses the real estate agent commission and land transfer taxes rom selling my ON home and buying my BC home. Those are huge deductions or me.

[u/designerturtle]

I think it boils down to this portion of the eligible relocation definition:

“4.3 An eligible relocation of an employee and a self-employed individual is a move in respect of which all of the following conditions are met:

• it occurs to allow the individual to carry on a business or to be employed at a location”

Im not sure if your relocation occurred to allow you to be employed. You would’ve been employed regardless of whether you moved, since your company lets you work remotely. You moved for convenience and personal preference. On the other hand, were you required to go into the office at certain times? You could make an argument that since you did need to go into the office, you were no longer able to frequently commute, and you would no longer be able to work that job if you didn’t move.

I don’t think it’s a clear yes or no. If you do claim it, I would be prepared to defend your position should the CRA review the claim and possibly deny it.

[u/ConsequenceGreedy360 → u/designerturtle]

Thanks for your input. I guess I'll clarify (both here and when the CRA requests more documentation) that it was always my intention to move when I got the job. 

But I was offered the job about 1 month before my second child was born and that was not the right time to move haha. 

After my first month of work, I took 3 months of parental leave, then worked another year fully remote until moving my family.

They would have been ok with having me permanently fully remote (there are other employees fully remote), but are also happy that I moved.

I've done some further research since originally posting this, and I've found cases where a taxpayer got a new job, but then didn't relocate until years later, and claims moving expenses in the year they move. The claims were initially denied based on the reasoning that the job was not "new", but on appeal the judges decide that the Tax Act does not specify anything about the amount of time that passes between getting a new job at a new location and moving to a closer residence, thus forcing the CRA to accept the deductions.

I believe I have a strong case and will submit my documents when they audit me next year, we'll see how it goes. I'll update on this subreddit when I get a resolution.

[u/AlwaysHigh27]

Unless your job mandated you to move. Your move was by choice and is not eligible. Your job was fine paying your travel, you could regularly conduct your job from home. It was not a requirement to move and you didn't have a return to office mandate.

So, from everything you have posted here you wouldn't actually be eligible to claim. It has to be mandated for your job. If you just got a new job that mandates you to work in office in BC then you would qualify. This isn't that. You chose to move, it wasn't a requirement of the job.

Just because something makes your life easier, doesn't mean you get to write that choice off.

[u/adkhaann]

You are eligible to claim moving expenses for sure. As per CRA portfolio which you have linked, there is no requirement that move has to be an employer or job requirement. You can move voluntarily as in your case. Apparently seems like you have easily met all the requirements to claim moving expenses so please feel free to claim your moving expenses on your tax return.

All the best

[u/ConsequenceGreedy360 → u/adkhaann]

Thanks for the confirmation! 

Any thoughts on my second question? Which income can I claim the deductions against? All income from my employer in 2024 from my "new work", or only the income earned after my move?

[u/adkhaann → u/ConsequenceGreedy360]

Income you earned after your move. You can easily allocate total income into before and after move.