The 2022 Federal Budget announced that, beginning in 2022, eligible workers will be able to deduct up to $4,000 per year for eligible expenses. This provision is part of the April 7, 2022 Federal Budget Bill C-19, tabled on April 28. Are you speaking to your clients about saving their receipts now? Here are details you need to share:
Eligible taxpayers. Specifically, eligible workers for the new Mobility Tax Credit include tradespersons and apprentices, who ordinarily reside in Canada and move to a temporary location in Canada who temporarily relocate to obtain or maintain employment in the construction industry. The relocation must be for a minimum of 36 hours.
Eligible expenses. These include:
Carry Overs Possible. Eligible expenses may be claimed for a period which is:
Not Eligible. Expenses may not be claimed if reimbursed or if their ordinary residence is not available for use during the temporary lodging period. Also, you can’t double up: expenses may not be claimed under this new provision and the moving expense deduction.
There is a Cap: This is also important: the deductible expenses are limited to 50% of the worker’s employment income. Expenses claimed as moving expenses may not also be claimed under this provision.