When Are Moving Expenses Tax Deductible?

For most taxpayers, moving expenses are not tax deductible for tax years 2018 through 2025. This suspension of the deduction is a direct result of the Tax Cuts and Jobs Act of 2017. While this change impacts a broad range of individuals, a specific exception exists for a particular group of taxpayers.

The primary exception to this general rule applies exclusively to active duty military members. These individuals may still be able to deduct eligible moving expenses if their move is due to a permanent change of station (PCS) order. This distinction is important, as it limits the availability of the deduction to a very specific set of circumstances rather than a general allowance for all moves.

Who Qualifies for the Deduction

The ability to deduct moving expenses is now largely confined to members of the U.S. Armed Forces. To qualify, an individual must be an active duty member of the Army, Navy, Air Force, Marine Corps, Coast Guard, or their reserve components. The move itself must be undertaken pursuant to a permanent change of station, an official order.

A permanent change of station includes a move from one permanent duty station to another. It also covers a move from the service member’s home to their first permanent duty station, or a move from their last permanent duty station to their home, provided the move occurs within one year of leaving the service. This specific criteria ensures the deduction is directly linked to the demands of military service.

For all other taxpayers, including those who move for a new job in the private sector or for self-employment, the moving expense deduction remains suspended. This suspension is currently in effect through tax year 2025. Unless Congress enacts new legislation, the deduction will not be available to the general public until at least 2026.

Types of Deductible Moving Expenses

For qualifying active duty military members, several categories of expenses are considered deductible. These generally include:
The costs associated with transporting the taxpayer and their household members from the old home to the new home, including travel by car (with mileage at a specific rate set by the IRS), airfare, or train tickets.
Lodging expenses incurred while en route to the new duty station. This covers the cost of temporary accommodation for the service member and their family during the actual journey. The cost of meals consumed during the move is not deductible.
The expenses related to shipping and storing household goods and personal effects, including the cost of packing, crating, and transporting furniture, clothing, and other personal belongings. Any in-transit storage costs incurred for these items during the move are also deductible.
The costs associated with connecting and disconnecting utilities at both the old and new residences. This might cover fees for establishing or terminating services such as electricity, gas, water, or internet.

Claiming the Moving Expense Deduction

Qualified active duty military members claim their deductible moving expenses on IRS Form 3903, Moving Expenses. This form is specifically designed to calculate the allowable deduction based on the expenses incurred. Once completed, the total deductible amount from Form 3903 is then reported on Schedule 1 (Form 1040), Additional Income and Adjustments to Income.

Maintaining accurate and thorough records is important when claiming this deduction. Taxpayers should retain all receipts, invoices, and other documentation supporting their claimed expenses. Copies of their permanent change of station orders are also needed for substantiating their eligibility for the deduction.

In instances where an employer, such as the Department of Defense, reimburses a service member for qualified moving expenses, these reimbursements are generally excludable from the service member’s gross income. This means that these reimbursements are not considered taxable income, provided they are for expenses that would have been deductible had the service member paid them directly. This exclusion simplifies the tax treatment for military personnel.