The Labour Mobility Deduction for Tradespeople is a tax deduction that allows skilled trades workers tax recognition on up to $4,000 annually for eligible out-of-pocket expenses that are not covered by an employer when temporarily relocating for work.
For eligible tradespeople and eligible expenses, this new tax deduction enables workers to claim eligible expenses which will lower your taxable income and therefore reduce the amount of tax you have to pay on your income.
All eligible expenses retroactive to January 1st, 2022 can be claimed through the Labour Mobility Deduction.
Who is eligible?
Skilled tradespersons and apprentices who relocate for at least 36 hours to a temporary lodging that is located at least 150 kilometres away from their primary residence to work on a construction site are eligible to use this deduction. The particular work location must be in Canada.
What are eligible expenses?
Eligible expenses would be reasonable amounts associated with expenses incurred for:
• Temporary lodging for the eligible individual near the particular work location
• Transportation for the individual for one round trip from the location where the individual ordinarily resides to the temporary lodging
• Meals for the individual in the course of travel while making one round trip to and from the temporary lodging.
How do I use the deduction?
If you are eligible, save your travel receipts and file the claims – or have your accountant file the claims – along with the rest of your tax return at the end of the fiscal year.