TTC Case Allows Moving Expenses Long After Job Started

"If you made a move in 2011 to significantly reduce your daily commute and kept all of your receipts, you can save yourself a chunk of money when you file your tax return.

As a result of a recent Tax Court of Canada decision, you can now deduct moving expenses if you moved to a new residence more than 40 kilometres closer to your workplace, even if you didn’t get a new job.

Glen Wunderlich was living in Toronto in mid-2004 when he accepted a position with the Burlington company Boehringer Ingelheim (Canada) Ltd. Upon receiving a promotion from the same company in early 2007, he decided to move to Oakville.

In determining his income for 2008, Wunderlich claimed moving expenses of $33,160. The Canada Revenue Agency denied these expenses on the basis that he did not have “a new work location.”

On appeal, Tax Court Judge Wyman Webb ruled that under the Income Tax Act an “eligible relocation” simply means “a relocation of a enable the taxpayer to be employed at a location in Canada.” There is no actual requirement that there be a move from “an old work location” to “a new work location.”

As authority for his interpretation, he cited a previous decision of Justice C. Miller in Gelinas v. The Queen allowing moving expenses when a taxpayer moved from a part-time job to a full-time job with the same company.

The Judge also found that there is nothing in the legislation establishing a time period within which a move must occur following the commencement of employment at a new work location. Therefore, he said expenses are deductible even if the taxpayer moves at least 40 kilometres closer to his workplace months or even years after he starts working at a new job.

Therefore Wunderlich’s appeal was allowed, and the matter was referred back to the Minister of National Revenue for reassessment on the basis that he was entitled to deduct moving expenses of $33,160 in determining his 2008 income.

And because he refused to take no for an answer, you and other taxpayers in a similar position can now also benefit from his perseverance."

TTC Link to Case here.