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labour mobility tax deduction for tradespeople
Canada’s Building Trades Unions fought hard, and won tax fairness for skilled tradespeople in 2022. Our members are now eligible for the Labour Mobility Tax Deduction for Tradespeople (LMD) and you can claim up to $4,000 per year in eligible travel and temporary relocation expenses as a journeyworker or apprentice retroactively back to January 1, 2022 if you have receipts.
What is the Labour Mobility Deduction?
The LMD provides an eligible tradesperson (apprentice or journeyworker) with a deduction for certain transportation, meals and temporary lodging costs incurred for travelling significant distances to earn income at a temporary work location from temporary employment in construction activities during the 2022 and subsequent taxation years.
You can claim up to $4,000 annually using form T777 Statement of Employment Expenses when filing your return, or using your preferred tax preparation software. Complete the calculation on Page 2 of the T777, and enter your claim amount on Page 1, Line 11 of the T777 form.
Note: You can’t claim the LMD if you’re claiming the eligible moving expenses, which are for permanent relocation.
Eligibility Rules
- You must make a temporary relocation that allows you to obtain or maintain employment, and the work must be of a temporary nature.
- To be eligible, your work and temporary lodging must be more than 150 kilometers from your ordinary residence, and within Canada.
- The temporary relocation must be more than a minimum of 36 hours.
What records you ned to keep
You need to keep records for each year you’re making the claim, including:
- A daily log or record of your expenses.
- Any tickets, ticket stubs, or travel receipts.
- Invoices or bills relating to your travel.
- Hotel bills or rental tenancy agreements.
- Monthly credit card statements.
- A log of your mileage (kilometers driven during your temporary relocation).
