Are Moving Expenses Tax Deductible? Who Can Claim Them

For tax years beginning after 2017, the ability to deduct moving expenses has been largely suspended for most taxpayers. This change, enacted by the Tax Cuts and Jobs Act of 2017, impacts many individuals. An exception exists for active-duty members of the U.S. Armed Forces who relocate due to a permanent change of station.

Eligibility for Moving Expense Deduction

Eligibility for the moving expense deduction applies primarily to active-duty members of the U.S. Armed Forces. To qualify, their move must be a direct result of a military order for a permanent change of station. This includes moves from home to an initial active-duty post, transfers between duty stations, or relocation from a final duty station back home or to a closer point within the United States. The move must occur within one year of ending active duty or within the period specified by the Joint Travel Regulations.

For all other taxpayers, including those relocating for a new job or self-employment, moving expenses are not deductible. This suspension of the deduction is in effect through the 2025 tax year. Individuals outside of the active-duty military exception cannot claim these expenses on their federal income tax returns.

Qualified Moving Expenses

For eligible active-duty military personnel, certain unreimbursed expenses incurred during a permanent change of station can be deducted. These include costs for moving household goods and personal effects, such as packing, crating, transporting belongings, in-transit storage, and insurance. The deduction also extends to storing and insuring household goods for up to 30 consecutive days after they are moved from the former home and before delivery to the new home.

Travel expenses from the old home to the new home for the taxpayer and their household members are also deductible, including lodging costs incurred during the journey. When using a personal vehicle, taxpayers can deduct either actual expenses for gas and oil or use a standard mileage rate. Parking fees and tolls incurred during the move can be added regardless of the method used to calculate vehicle expenses.

Non-Deductible Moving Expenses

Even for active-duty military members, certain expenses related to a move are excluded from the deduction. Meals consumed during travel or while moving household goods are not deductible. Expenses for house-hunting trips or temporary living costs incurred before the actual move are also not permitted.

Costs associated with buying or selling a home, such as closing costs, mortgage fees, or points, are not deductible. Other non-deductible items include expenses for breaking a lease, acquiring new furnishings, or preparing a new home for occupancy. Car tags, driver’s licenses, and general repairs or maintenance for a vehicle used during the move are also not deductible.

Record Keeping for Moving Expenses

Maintaining accurate records is important for any eligible taxpayer claiming moving expense deductions. This documentation serves as proof to the Internal Revenue Service (IRS) for the claimed amounts. Eligible taxpayers should keep all receipts, invoices, and other financial records related to their moving expenses, including receipts for transportation costs (gas, oil, tolls, airfare), invoices from moving companies, storage facilities, and insurance providers, and records detailing lodging expenses.

Taxpayers should keep these records for at least three years from the date their tax return was filed or the due date of the return, whichever is later. The IRS Form 3903, Moving Expenses, is used to calculate and report these deductible costs.