If I Moved During the Year, What Am I Able to Claim

Medical students and residents are a busy bunch. With long hours and a hectic schedule, figuring out your tax filings can slip down your priority list.

Medical students and residents typically ask about five topics: deductions against your income, moving expenses, impact of extra income, reducing taxes on salary and the benefits on incorporation.

In a five-part article series, we are looking at each of these topics, providing guidance for you to maximize your money.

If I moved during the year, what am I able to claim and how does this change my tax return?

Starting a new program at university or a new job means you might be packing your bags and heading to a new place. Most medical students end up moving two (or more) more times for residency and eventually for practice, depending on placement and job opportunities in their specialty. These moves can lead to increased expenses and other changes to personal taxes, especially if a move is between provinces.

There are two things to consider if you moved during the year: the deduction for moving expenses and the transfer of tuition credits to a new province. Let’s start with moving expenses.

Moving can be an expensive process. To help offset the costs of these expenses, the Income Tax Act allows for the deduction of certain moving expenses. To qualify, the move must be to attend school or for new employment and the distance must be over 40 kilometres. Moving expenses can be deducted in two different ways: the simplified method, or the detailed method.

Under the simplified method, an allowance is provided for the kilometres travelled, the number of meals consumed and the number of nights required for the move. Additional expenses such as moving boxes can also be claimed if you keep the receipts.

The detailed method is based on actual expenses. This includes items such as gas, hotel stays, meals eaten, flights, storage, moving boxes or supplies and any other expense deemed necessary for the move. Keep the receipts for all eligible expenses as CRA requests these for almost every claim made.

In addition to moving expenses, students and residents who move between provinces can also transfer their tuition credits. Each province has different rules for the calculation of credits. However, all provinces except Quebec match the tuition credits of other provinces when an individual moves. Credits from Quebec are tied to the province, but students get credit in other provinces for the equivalent of the federal credits earned while in Quebec. Credits from provinces other than Quebec cannot be transferred into Quebec and therefore no credit is given for this in the first year in the province.

Learn more about moving expenses and tuition credits on the Canada Revenue Agency website. For guidance specific to your situation, please consult with your personal tax professional.

Did you know that MNP offers free personal tax returns for medical students and residents? To see if you qualify for the program, or for more information on how MNP can help you with your taxes, please contact Melanie Langevin, CPA, CMA at 613-691-4226 or melanie.langevin@mnp.ca.