Tax Deductions for Military Moving Expenses
For active-duty members, a PCS move has special tax considerations. Understand how to correctly account for reimbursements and unreimbursed expenses when filing.
Active-duty military members who relocate due to a permanent change of station (PCS) have distinct tax regulations. While the Tax Cuts and Jobs Act of 2017 suspended the moving expense deduction for most taxpayers, an exception exists for armed forces personnel. This provision acknowledges the non-discretionary nature of a PCS move. Consequently, service members have different rules for how government reimbursements are taxed and what out-of-pocket costs can be deducted.
Tax Treatment of Military Move Reimbursements
When the government provides financial assistance for a PCS move, the tax implications depend on how the funds are provided and used. If the military directly pays a moving company for transporting household goods or provides a direct reimbursement for documented out-of-pocket expenses, these payments are not considered taxable income. These non-taxable allowances will not be included in the wages reported on the service member’s Form W-2.
A different scenario occurs with a Personally Procured Move (PPM), where the service member manages the move themselves. In a PPM, the government pays the service member a set amount, a percentage of what it would have cost the government to hire a contractor. If the service member’s actual moving expenses are less than this allowance, the excess amount is considered profit and becomes taxable income. For example, if a service member receives a $10,000 PPM allowance and their moving costs are $7,000, the remaining $3,000 is taxable and will be reported on their Form W-2.
Allowable Moving Expense Deductions
Service members can deduct unreimbursed moving expenses, which are costs that exceed any allowances or reimbursements provided by the government. These deductions are claimed as an adjustment to income, meaning they can be taken even if the taxpayer does not itemize. The primary categories of deductible expenses relate to the transportation and storage of household goods and the travel of the service member and their family to the new location.
Qualifying transportation and travel costs include:
- Fees for hiring a moving company, renting a truck or trailer, and purchasing packing supplies
- The cost of shipping a car or a pet
- Lodging for the service member and their household members while en route from the old home to the new one
The cost of meals consumed during the move, however, is not a deductible expense.
For those who drive their personal vehicles during the move, expenses can be calculated using either the actual cost method or the standard mileage rate. The actual cost method requires tracking all spending on gas and oil. A more straightforward approach is using the standard mileage rate for moving, which the IRS sets annually; for 2025, the rate is 21 cents per mile. This rate can be applied to the miles driven between the old and new duty stations, along with parking fees and tolls.
Another allowable deduction is the cost of storing and insuring household goods. Service members can deduct these costs for any period of 30 consecutive days after the items are moved from the old home and before they are delivered to the new one. This is useful when there is a gap between vacating a former residence and securing a new one at the next duty station.
Required Information and Forms for Tax Filing
To claim moving expense deductions, active-duty military personnel must use IRS Form 3903, Moving Expenses. This form is used to calculate and report these deductions on a federal tax return. The official form and its instructions can be downloaded from the IRS website.
Completing Form 3903 requires specific information related to the move. Filers will need the total number of miles driven from their old home to their new home to calculate the vehicle expense deduction using the standard mileage rate. They must also have records of actual transportation costs, such as moving company invoices or truck rental receipts, and any costs for storing and insuring household goods for up to 30 days.
Maintaining thorough documentation is a requirement. Service members should retain all receipts for qualifying expenses, including lodging, gas, tolls, and storage fees. A copy of the official PCS orders is also necessary to prove the move was required by the military, and these records are the primary evidence needed if the IRS requests verification.
The Reimbursement Claim Process
The process to receive reimbursement from the military for out-of-pocket expenses is a separate action from filing taxes. The procedure involves submitting a travel voucher or claim, most commonly using DD Form 1351-2, the Travel Voucher or Subvoucher. This form documents all expenditures for which the service member is seeking repayment from their finance office.
The service member completes the DD Form 1351-2, detailing each expense, and submits the completed voucher package to the appropriate military finance office. Many installations now offer digital submission portals, such as the Army’s SmartVoucher system, which can streamline the process and allow for easier tracking. The finance office reviews the claim for accuracy and compliance with military regulations. Processing times can vary, and upon approval, the reimbursed funds are paid directly to the service member’s bank account.