Chapter History S1-F3-C4, Moving Expenses


The purpose of a Chapter History page is to highlight any amendments to the information contained in an interpretation bulletin that is now reflected in a chapter of an income tax folio as well as to identify any subsequent amendments to a folio chapter. It outlines amendments that have been made as a result of legislative changes and proposed legislative changes, precedential court decisions, as well as new or revised interpretations of the Canada Revenue Agency (CRA).

Except as otherwise noted, all statutory references herein are references to provisions of the Income Tax Act, R.S.C., 1985, c.1 (5th Supp.), as amended and all references to a Regulation are to the Income Tax Regulations, C.R.C., c. 945, as amended.

Update April 20, 2017

¶4.3(a),(c) and ¶4.4(c) are revised to improve readability.

¶ 4.12 is revised to add a new heading and new text (formerly included in ¶19 of IT-178R3) as well as an example to illustrate the concept of absent from Canada, but resident in Canada. The heading is added to the table of contents and this example becomes Example #1. The remaining examples are re-numbered accordingly.

¶4.15 of the French Chapter only is revised to insert the word “tous” in the last sentence so that it reads, “Dans tous les cas….”

¶4.18 of the French Chapter only is revised for clarity so that the first sentence finishes with “dans cette année subséquente”.

Update April 5, 2016


Income Tax Folio S1-F3-C4, Moving Expenses, replaces and cancels Interpretation Bulletin IT-178R3, Moving Expenses

In addition to consolidating the content of the former interpretation bulletin, general revisions have been made to improve readability. Any substantive technical and interpretive changes to the information outlined in the former interpretation bulletin are described below.

Legislative and other changes

Throughout the Chapter, the term spouse has been replaced with the term spouse or common-law partner based on the 2000 same-sex partner bill. Also, the term eligible moving expenses has been removed to avoid giving the impression that it is defined in the Act, as is the case for the term eligible relocation. Therefore, the publication now refers to expenses that are eligible as moving expenses and to eligibility of moving expenses.

¶4.1 is added as an introduction. It groups together the concepts of eligible relocation, the eligibility of certain moving expenses, and their deductibility.

¶4.3 and ¶4.4 (formerly ¶1 and ¶5 of IT-178R3) are revised to reflect a number of legislative amendments to subsections 62(1) and 248(1) (definition of eligible relocation). In particular, subsection 62(1) was amended by S.C. 1999, c.22, s. 17(1), effective for the 1998 and subsequent tax years, to refer to the definition of eligible relocation which was added by s. 80(12) of the same 1999 legislative amendment to subsection 248(1), applicable to all tax years. This definition was subsequently amended by S.C. 2013, c. 34 (formerly Bill C-48), s. 358(4), applicable to tax years ending after October 2011. Prior to the 1999 legislative amendment, subsection 62(1) used the phrase "commenced to carry on a business or to be employed [...] or to be a student", which no longer applies. Therefore, words used in IT-178R3 such as "to start" a job or business and "to begin" full-time attendance at an educational institution, are no longer used in this Chapter. Also, the information in ¶20 of IT-178R3 has not been included in this Chapter because it is no longer necessary, given the definition of eligible relocation explained in ¶4.3 and 4.4.

¶4.4 also takes into account the current wording of subsection 62(2) in the French version of the Act, which allows students to have an eligible relocation as long as at least one of their residences, the old residence or the new residence, is located in Canada. Subsection 62(2) was previously amended by S.C. 1999, c. 22, s. 17(2), applicable to tax years after 1997, to make reference to the definition of eligible relocation provided in subsection 248(1).

¶4.5 (formerly included in ¶6 to ¶9 of IT-178R3) is revised so as not to duplicate the information contained in Income Tax Folio S1-F2-C1, Education and Textbook Tax Credits.

¶4.6 is added to reflect paragraphs 115(2)(a), (b) and (f) in that students who are entitled to the moving expense deduction include full-time students who no longer reside in Canada following their departure to attend an educational institution that offers courses at the post‑secondary level, as well as full-time students who come to Canada from another country to attend such an institution.

¶4.7 (formerly included in ¶15 of IT-178R3) is revised in particular to reflect the legislative amendments made to subsections 62(1) and 248(1) (definition of eligible relocation) referred to under the History note regarding ¶4.3 and ¶4.4. ¶4.7 is also reworded to emphasize the importance of the link between moving and carrying on a business or being employed at a location in Canada. It is also reworded to emphasize the importance of the connection between moving and attendance at an educational institution in the case of a student.

¶4.8 is added to specify that a move that occurs solely for personal reasons cannot be considered as an eligible relocation.

¶4.9 is added to illustrate the type of circumstances in which a move of an employee and a self-employed individual may be considered to occur for employment or business purposes.  

¶4.10 is added to specify that a student’s move does not cease to be considered as an eligible relocation solely because it occurs to enable the student to both be employed and be in full-time attendance at an educational institution where he or she is enrolled in a program at a post-secondary level.  

¶4.11 (formerly ¶18 of IT-178R3) refers to Income Tax Folio S5-F1-C1, Determining an Individual's Residence Status for details on the concept of ordinarily resided.

¶4.12 replaces ¶19 of IT-178R3 given that the latter paragraph no longer corresponds to the current version of the Act: former section 63.1 has been repealed, whereas since 1998 section 64.1 no longer applies to moving expenses because of its amendment by S.C. 1999, c. 22. ¶4.12 refers to Income Tax Folio S5-F1-C1 for details on the concepts of factual residence and deemed residence.

¶4.13 (formerly included in ¶2 and ¶10 of IT-178R3) is revised to reflect the legislative amendment made to subsection 62(1) by S.C. 1999, c. 22, subsection 17(1), which now refers to the definition of eligible relocation added to subsection 248(1). ¶4.13(a) explains that payments on the individual’s behalf are no longer limited to those made by the individual’s employer, as was previously stated under 2(a) of IT-178R3

¶4.13(c) also takes into account a legislative amendment made to subparagraph 62(1)(c)(i) by S.C. 2009, c. 2, s. 16(1), applicable to the 2008 and subsequent tax years. This amendment ensures that any amounts received under the Wage Earner Protection Program Act in respect of the individual's employment at a new work location are taken into account when computing the deduction for moving expenses.

¶4.13(c) is also expanded to specify the amounts that are included in a student's income because of subparagraph 115(2)(e)(ii).

¶4.13(d) is expanded to replace the information formerly included in ¶4 of IT-178R3 and to remove the reference to taxable benefits in order to avoid giving the impression that the information applies only to employees.

¶4.13(d) is also expanded to clarify the CRA’s practice to accept a netting approach to calculating moving expenses, which reduces the latter by reimbursements or allowances  that a taxpayer may have received.

¶4.14 is added to reflect the legislative amendment made to subsection 62(1) by S.C. 1999, c.22, s. 17(1), under which paragraph 62(1)(e) has been repealed. As such, subsection 248(28) now applies with the same effect as that former paragraph, and ¶2(c) and ¶10(c) of IT-178R3 have therefore been removed.

¶4.15 is added to emphasize that moving expenses are not deductible in computing an individual’s income if they are paid by a person other than the individual or the individual’s spouse or common-law partner. It also reflects the CRA’s practice that allows spouses or common-law partners to decide who will claim the moving expense deduction or how the deduction will be shared.

¶4.16 (formerly included in ¶3, ¶11, and ¶22 of IT-178R3) is revised to clarify that an individual may not deduct moving expenses until they are paid.

¶4.17 is added to clarify that an individual may not deduct moving expenses until the eligible relocation has occurred.  

¶4.18 and ¶4.19 (formerly included in ¶3, ¶11, and ¶22 of IT-178R3) are revised to reflect a legislative amendment made to subsection 62(1) by S.C. 1999, c. 22, s. 17(1), applicable to the 1998 and subsequent tax years. In particular, the moving expense deduction is no longer limited to the tax year in which the eligible relocation occurred and to the immediately following tax year.

¶4.20 is added to specify that expenses that are paid must relate to an eligible relocation in order for them to be considered as moving expenses.

¶4.22 (formerly ¶12 of IT-178R3) is revised to include reference to civil law hypothecs and to provide additional details. In addition, reference to after 1997 in ¶12(g) and (h) has not been included in ¶4.22, as the legislative provisions that were in effect before 1998 are no longer relevant in most cases.

¶4.23 is added to specify that costs that are incidental to a move, such as those incurred to replace damaged or lost goods, are not considered to be moving expenses.

¶4.24 is added to provide details on the goods and services tax and the value added tax paid as part of an eligible relocation.

¶4.25 (formerly included in ¶13 and in the first part of ¶21 of IT-178R3) is revised to refer the reader to the CRA website for a discussion of the detailed and simplified methods for calculating meal and vehicle expenses, thereby avoiding the duplication of information.

¶4.26 is added to clarify ¶4.22(e) concerning the impact of a delay in selling the old residence on the eligibility, as moving expenses, of expenses related to such a sale.

¶4.27 is added to specify that expenses incurred for the sale of the old residence or the purchase of the new residence may be eligible expenses for the individual regardless of whether the residence is the individual’s property or that of their spouse or common‑law partner.

¶4.28 (formerly included in ¶21 of IT-178R3) refers the reader to the CRA website for additional information on moving expenses.

¶4.31 and Examples 1 and 2 are added to illustrate the treatment of moving expenses in the context of multiple moves.

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