Canadian Taxes Moving Expense Deduction

[AstroCanada 206]

So, I moved from Canada to the US.  It says that it's possible to deduct moving expenses from Canadian taxes.  But it also indicates that the moving expenses can only be deducted from:

Quote

 If you are an employee, this is the amount(s) reported on your T4 and/or T4A slips relating to the new work location and that are included on lines 101 and/or 104, minus any amount relating to the new work location claimed on lines 207, 212, 229, 231, and 232 of your return. 

I don't intend to include my US income on my Canadian taxes, as I am no longer a resident of Canada after my move.  Does this mean I can't claim the moving expenses on my Canadian taxes?

[Lemonslice 4,852]

If you are non-resident, it is my understanding that you can only deduct moving expenses if you are also a full time student.  See the guide for line 219.  

 

Quote

Non-residents and non-residents electing under section 217 – You can only deduct moving expenses if you were a full time student during 2016. If this is your situation, contact us for the special rules that apply to you.

Source: http://www.cra-arc.gc.ca/E/pub/tg/5013-g/5013g-16e.pdf

[zilchfox 296]

13 hours ago, Lemonslice said:

If you are non-resident, it is my understanding that you can only deduct moving expenses if you are also a full time student.  See the guide for line 219.  

 

Source: http://www.cra-arc.gc.ca/E/pub/tg/5013-g/5013g-16e.pdf

Shoot. I was definitely not a student in 2016. OP gave me hopes.

[AstroCanada 206]

On March 14, 2017 at 6:25 PM, Lemonslice said:

If you are non-resident, it is my understanding that you can only deduct moving expenses if you are also a full time student.  See the guide for line 219.  

 

Source: http://www.cra-arc.gc.ca/E/pub/tg/5013-g/5013g-16e.pdf

It was confusing because I was a resident of Canada up until the move.  Alas, one can only deduct income at the new location.  Perhaps my partner can deduct it next tax year, but then again he won't have any Canadian income.

 

Sigh, cross-border taxes with a marriage and a move are complicated.

[13roots 35]

Why not claim the moving expenses on your US tax return instead? That's what I did on my 2016 taxes I just filed.

[Lemonslice 4,852]

On 4/1/2017 at 0:47 AM, 13roots said:

Why not claim the moving expenses on your US tax return instead? That's what I did on my 2016 taxes I just filed.

How did your moving expenses meet the IRS criteria? 

[13roots 35]

12 hours ago, Lemonslice said:

How did your moving expenses meet the IRS criteria? 

You're right, I forgot about that. We qualified because my husband also moved. I moved from Canada and he moved more than 50 miles to our new location in TX so we were able to deduct all the expenses for him and me.

 

Here is an explanation of the IRS qualifications - https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/IRS-Moving-Expense-Deductions/INF14389.html and the section that applied to my expenses: You can also include the cost of traveling to the new location for yourself and other members of your household. If this doesn't apply to you, then it may not be tax deductible. 

 

From the Canadian side, you probably wouldn't qualify for the moving expense since your move was out of the country, but you are not automatically a non-resident unless you chose to be treated as a resident in the US, for example, if that was tax advantageous. In my case I moved in November and continued to work remotely, and all my income for that year was in Canada, while all of his was in the US. But it was more tax advantageous (and frankly simpler) to be treated as a non-resident of Canada and resident of the US for that tax year. 

 

Here is a link to the Canada residency qualifications - http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

 

I hope this helps!

Edited April 4, 2017 by 13roots

[Lemonslice 4,852]

16 minutes ago, 13roots said:

You're right, I forgot about that. We qualified because my husband also moved. I moved from Canada and he moved more than 50 miles to our new location in TX so we were able to deduct all the expenses for him and me.

 

Here is an explanation of the IRS qualifications - https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/IRS-Moving-Expense-Deductions/INF14389.html and the section that applied to my expenses: You can also include the cost of traveling to the new location for yourself and other members of your household. If this doesn't apply to you, then it may not be tax deductible. 

 

From the Canadian side, you probably wouldn't qualify for the moving expense since your move was out of the country, but you are not automatically a non-resident unless you chose to be treated as a resident in the US, for example, if that was tax advantageous. In my case I moved in November and continued to work remotely, and all my income for that year was in Canada, while all of his was in the US. But it was more tax advantageous (and frankly simpler) to be treated as a non-resident of Canada and resident of the US for that tax year. 

 

Here is a link to the Canada residency qualifications - http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

 

I hope this helps!

Thank you. I was curious about the how.

 

 I understand residency and taxation can be tricky, I'm a Canadian non resident, with income that is taxable in Canada/non taxable in the USA...

 

 

[13roots 35]

12 minutes ago, Lemonslice said:

Thank you. I was curious about the how.

 

 I understand residency and taxation can be tricky, I'm a Canadian non resident, with income that is taxable in Canada/non taxable in the USA...

 

 

I used TurboTax, so it was fairly straight forward... it asks if you have moving expenses and you enter the amounts (converted from CAD to USD if applicable). It also asks you to enter the old and new zip code, then allows you to separate the expenses into different categories - $x for storage, $y for transportation, $z for moving company, etc. 

 

Technically all your Canadian income is taxable in the US and vice versa, but due to tax treaty between the two countries you will not be double taxed. So, in filing my Canadian taxes I included my Canadian income (and Canadian taxes) and my husband's US income converted to CAD (and US taxes), ditto for filing in the US. We filed married filing jointly in the US, and got a large refund. In Canada I got a small refund, but only because I tended to overpay taxes as a habit.

 

In the year I moved to the US, since I filed as a non-resident of Canada I didn't file for the following year.

Edited April 4, 2017 by 13roots

[Lemonslice 4,852]

I've been in the USA 7 years now, the treaty clearly states that I'm to be taxed back in Canada.  CRA package ready, I'll mail it next weekend...

[13roots 35]

3 hours ago, Lemonslice said:

I've been in the USA 7 years now, the treaty clearly states that I'm to be taxed back in Canada.  CRA package ready, I'll mail it next weekend...

I'm not sure I follow. Are you referring to your taxes from 7 years ago when you first moved from Canada to the US? If you are married to a USC, you can choose to be treated as a US resident for tax purposes in the US, which would then make you a non-resident or deemed non-resident in Canada for tax purposes. If you were working in the US and paid taxes in the US, you should not have to pay taxes in Canada as well if you were a non-resident of Canada. If you were considered a resident in Canada, then you would probably pay the difference in taxes owed in Canada minus what was already paid in the US, since income taxes in Canada are generally higher.

 

There is a forum that deals specifically with tax questions. Perhaps your particular circumstances warrant a different tax strategy than mine, and someone may have posted something there that is more relevant.

 

Good luck!