When Can You Deduct Moving Expenses?

The ability to deduct moving expenses on your federal income tax return is a limited provision. For most individual taxpayers, this deduction is no longer available. Rules for claiming these expenses and eligible costs have become narrow due to recent tax law changes. Understanding these limitations is important for anyone considering a move.

Who Qualifies for the Deduction

For tax years beginning after 2017, the deduction for moving expenses is suspended for most individual taxpayers. This means if you moved for a new job or changed residences for personal reasons, you cannot deduct these costs from your federal taxes. This suspension is in effect through 2025.

The only exception applies to active duty members of the U.S. Armed Forces. These service members can deduct unreimbursed moving expenses if their move is due to a military order and constitutes a permanent change of station (PCS). A PCS includes a move from home to a first post of active duty, from one permanent post of duty to another, or from a last post of duty to home or a nearer point in the United States within one year of ending active duty. This exception also extends to a service member’s spouse and dependents in certain situations.

Deductible Moving Expenses

For qualifying active duty military members, certain unreimbursed expenses related to a permanent change of station can be deducted. Deductible costs include moving household goods and personal effects, encompassing packing, crating, transporting, insuring belongings, and shipping vehicles and pets.

Travel expenses for the service member and their household members from the old home to the new home are also deductible. This includes transportation costs, such as airfare or driving a personal vehicle, and lodging expenses incurred during the move. The cost of meals consumed during the move is not deductible. Expenses covered by government reimbursements or allowances that are excluded from income cannot be deducted.

Claiming the Deduction

Qualified individuals claim their moving expense deduction on Form 3903, “Moving Expenses.” This form calculates the allowable deduction for active duty members of the Armed Forces. If multiple qualifying moves occurred within the same tax year, a separate Form 3903 should be used for each move.

After calculating the deductible amount on Form 3903, the total is reported as an adjustment to income on Schedule 1 (Form 1040), “Additional Income and Adjustments to Income.” This allows the deduction to reduce your adjusted gross income, even if you do not itemize deductions. Maintaining accurate and detailed records, such as receipts, invoices, and mileage logs, is important to substantiate any claimed deductions in case of an IRS inquiry.