Monday, November 21, 2022

Eligible Tradespeople Can Deduct up to $4,000 per Year for Temporary Relocation

In an exciting new development for tradespeople and apprentices across Canada, the Labour Mobility Deduction for Tradespeople in the 2022 federal budget enables tax recognition on temporary relocation and travel expenses of up to $4,000 for eligible tradespeople and apprentices

Designed to help relieve workers’ out-of-pocket expenses that are not reimbursed by the employer, this deduction is a big win for tradespeople who must travel or relocate temporarily for work.

The Labour Mobility Deduction for Tradespeople expands tax recognition beyond the previous policy, which only recognized for tax purposes relocation that involved a change in an individual’s ordinary residence.

The Labour Mobility Deduction applies retroactively to January 1, 2022, and can lower your taxable income by up to $4,000 per year, reducing the amount of income that gets taxed. According to the 2022 Federal Budget, you may be eligible for the deduction if you are a tradesperson or apprentice who is a Canadian resident and who, in 2022, temporarily relocated to obtain or maintain employment within Canada that involved construction activity.

To qualify, your temporary lodging must be at least 150 kilometres closer to your work location than your normal residence, your work location must be in Canada, and the relocation must have been for a minimum of 36 hours. Expenses eligible for inclusion in the deduction include for temporary lodging, expenses for one round trip to that lodging, and meals during travel for one round trip. This deduction only covers expenses that are not reimbursed by the employer.

You can claim the deduction by saving eligible receipts from January 1, 2022, to December 31, 2022, and by filing the claims or having your accountant file the claims with the rest of your 2022 tax return.

Do I Qualify for the Labour Mobility Deduction?

• In 2022, I temporarily relocated to obtain or maintain employment.

• My employment involved construction activity.

• I am a resident of Canada.

• My temporary work location was in Canada.

• My temporary relocation lasted for at least 36 hours.

• My temporary lodging was at least 150 kilometres closer to my work location than my normal residence.

• My expenses were paid out of pocket and not reimbursed by my employer.

Eligible Tradespeople Can Deduct up to $4,000 per Year for Temporary Relocation

Do I Qualify for the Labour Mobility Deduction?

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