Can a student can deduct moving expenses, originally incurred in order to attend a post-secondary institution, against employment income related to the student’s post-secondary training or against other employment income, regardless of whether the employment is located in the region of the educational institution or in any other region? CRA responded:
The 2006 Federal Budget announced an increase in the scholarship and bursary exemption so that … a student can no longer deduct moving expenses where the student’s income is derived solely from scholarships or fellowships.
Thus, in the situation you presented, a student who incurs moving expenses to pursue post-secondary education cannot deduct those expenses against future employment income - whether or not the employment is located in the region of the educational institution - related to the new training.
However, a student who incurs moving expenses both to pursue post-secondary education and to take up employment - as opposed to employment obtained after the completion of post-secondary education - would be able to deduct the moving expenses against employment income provided the move constitutes an eligible relocation.