Most moving costs are not tax deductible anymore

For most people, moving expenses stopped being tax deductible in 2018. The Tax Cuts and Jobs Act removed the moving expense deduction for all taxpayers except active-duty military members and their families. If you moved for a job, school, or any other reason and you are not military, you cannot deduct those costs on your federal tax return.

This applies whether you paid for the move yourself or your employer reimbursed you. It also applies whether you moved across town or across the country. The rule is straightforward: no deduction for civilian movers.

Some states still allow a moving expense deduction on their state tax returns, but this is rare and depends entirely on where you live and file. Federal taxes are what most people file, and that is where the deduction no longer exists.

Key Takeaways

  • Civilian moving expenses have not been deductible on federal taxes since 2018, regardless of the reason for the move.
  • Active-duty military members and their families can still deduct unreimbursed moving costs on their federal return.
  • A few states allow moving deductions on state returns, but you need to check your specific state's rules.
  • If your employer paid for your move, you generally do not report that as income, but you also cannot deduct it yourself.

Who can still deduct moving costs

Active-duty military members are the main exception. If you are on active duty in the U.S. Armed Forces and you moved because of a military order, you can deduct unreimbursed moving expenses on your federal tax return. This includes the cost of transporting your household goods, your car, and your family members to your new duty station.

The move must be connected to a military order or assignment. If you moved on your own initiative, even if you are military, the deduction does not explore. The IRS distinguishes between moves ordered by the military and moves you choose to make.

If the military reimbursed you for part or all of the move, you can only deduct the portion you paid out of pocket. You report this on Form 3903 when you file your taxes.

What counts as a moving expense for military members

If you are may be able to access to deduct moving costs, the IRS allows you to deduct reasonable expenses directly related to the move itself. This includes the cost of hiring a moving company, packing materials, and transportation of your household goods and personal belongings.

You can also deduct the cost of moving your car and the cost of traveling to your new location, including lodging and meals during the trip. Some people deduct the cost of temporary storage if your goods could not be delivered right away.

What you cannot deduct: house-hunting trips before the move, meals and lodging once you arrive at your new location, home improvements, or any costs related to selling or buying a home. The deduction covers the physical act of moving, not the broader expenses of relocating your life.

How employer-paid moves are treated

If your employer paid for your moving costs, you do not report that payment as taxable income on your W-2. This is true whether you are military or civilian. The payment goes to the moving company directly, and you do not owe tax on it.

However, you also cannot deduct it yourself. You cannot deduct something your employer already paid for. The rule is: if the employer covers it, it is not taxable to you, but it is also not deductible by you.

If your employer gave you a lump sum to cover moving costs and you spent less than that amount, the leftover money may be taxable. Check with your employer's payroll department about how they handle unused moving allowances.

State tax rules for moving deductions

A small number of states still allow moving expense deductions on state tax returns. New York, for example, allows a deduction for certain moves. However, the rules vary widely by state, and most states have either eliminated the deduction or never had one.

If you live in a state with a state income tax, contact your state's tax authority or check their website to see if moving deductions are available. Do not assume your state follows federal rules — some states have their own rules that differ significantly.

Even if your state allows a deduction, you will still file your federal return without claiming moving expenses. State and federal deductions are separate.

How to report moving expenses if you are may be able to access

If you are an active-duty military member with unreimbursed moving expenses, you report them on Form 3903: Moving Expenses. You can find this form on the IRS website or through tax software.

On the form, you list each category of expense: transportation of household goods, travel to your new location, and any other may have access to costs. You attach receipts or documentation to support the amounts you claim. Keep copies of moving company invoices, hotel receipts, and mileage records.

You file Form 3903 with your tax return. The deduction reduces your taxable income, which may lower the amount of tax you owe or increase your refund.

What to do if you are unsure whether your move qualifies

If you are military and received a move order, your move almost certainly qualifies. If you are civilian and moved for any reason other than military duty, your move does not may have access to for the federal deduction.

If you are unsure about your specific situation, you can contact the IRS directly at 1-800-829-1040 or consult a tax professional. A tax preparer can review your circumstances and tell you whether any deduction applies to you.

Do not guess on your tax return. If you claim a deduction you are not may have access to to, the IRS may disallow it and assess penalties and interest. It is better to ask first.

Frequently Asked Questions

Can I deduct moving costs if my employer did not pay for the move?

No, unless you are active-duty military. For civilians, the moving expense deduction was eliminated in 2018 and does not come back based on who paid for it. Even if you paid entirely out of pocket, you cannot deduct it on your federal return.

What if I moved for a new job — can I deduct that?

Not anymore. Before 2018, you could deduct moving costs if you moved for work. That deduction ended for all non-military taxpayers. Moving for a job does not create a deduction now.

Do I have to report my employer's moving reimbursement as income?

No. If your employer paid the moving company directly or reimbursed you for moving expenses, that payment is not taxable income. You do not report it on your W-2 or your tax return. However, if your employer gave you a general relocation bonus not tied to actual expenses, that is taxable.

Can I deduct moving costs on my state taxes even if I cannot on federal?

Possibly, depending on your state. A few states allow moving deductions that the federal government does not. Check your state's tax website or contact your state revenue department to see if you live in one of those states.

What if I moved more than once in the same year?

If you are military and had multiple moves ordered by the military, you can deduct the expenses for each move. If you are civilian, you cannot deduct any of them. The number of moves does not change the rule.