IRS Form 3903: Are Moving Expenses Tax Deductible?
Tax reform changed rules related to moving expenses. Are moving expenses tax deductible? For most people, the answer is no. Military personnel can still claim the deduction but must meet certain requirements to qualify.
Key Takeaways
- Most taxpayers can't deduct moving expenses for tax years 2018–2025. However, if you moved prior to 2018, you may be able to amend a previous return to deduct your moving expenses.
- If you serve as an active-duty military member, you may be able to claim moving deductions against your taxable income and include them on Form 3903 as an attachment to your Form 1040.
- An active duty military member’s move must result from a military order and permanent change of station to qualify as a deductible moving expense.
- You can't deduct expenses that are reimbursed or paid for directly by the government, but you can deduct your out-of-pocket moving expenses if they exceed the amount that you were reimbursed.
Tax deductions for moving expenses
The 2017 Tax Cuts and Jobs Act changed the rules for claiming the moving expense tax deduction. For most taxpayers, moving expenses are no longer deductible, meaning you can no longer claim this deduction on your federal return. This change is set to stay in place for tax years 2018-2025.
But if you need to amend a previous return prior to tax reform, or if you serve in the active military and meet certain circumstances, you may qualify for a deduction. If neither of these describe your situation, you may still want to track your expenses because some states continue to provide a deduction on your state tax return if you meet specific requirements.
Learn about the new moving tax deduction rules and what you need to know.
What are moving expenses?
When tallying the expenses you plan to claim as your moving expense tax deduction, all of them must count as both reasonable and necessary to your move.
Reasonable moving expenses may include the cost of the following:
- gas or the mileage on your vehicle
- rental trucks
- short-term storage
- packing
- insurance
For a long-distance move, you might include the cost of lodging at a hotel on the way to your new home, but you can't deduct expenses for meals.
The IRS allots a standard mileage rate of 22 cents per mile for 2023 that you can use to calculate your travel expenses. But if you prefer, you can keep up with your actual transportation costs and deduct those instead. Eligible travel costs include:
- gas
- oil
- parking fees
- tolls
Are moving expenses tax deductible?
If you moved prior to 2018 but didn't claim the moving expense tax deduction, you may be able to file an amended claim to deduct your moving expenses. Likewise, if you serve as an active-duty military member, you can claim moving deductions against your taxable income and include them on Form 3903 as an attachment to your Form 1040.
For active duty military members, your move must result from a military order and permanent change of station. You can deduct your unreimbursed moving expenses for you, your spouse, and your dependents. You can't deduct expenses that are reimbursed or paid for directly by the government.
You must satisfy two primary criteria to qualify for counting these expenses as tax deductions: meeting the time and distance tests.
TurboTax Tip:
If you’re reimbursed for moving expenses and the reimbursement exceeds your total out-of-pocket expenses, you'll have to claim the excess reimbursement as taxable income.
What is the time test?
The timing of your move must be closely related to the start of your new employment to qualify for the tax deduction. To meet this standard, you'll have to start your new job and work full time for at least 39 weeks within the first 12 months after your move.
There's an exception if you start your new job months before your family moves to the new location because of special circumstances, such as a spouse who's receiving medical care or a child who's finishing school near your old home. In this case, you can still deduct your moving expenses even though your move occurs long after your first day of work.
What is the distance test?
Another requirement involves the distance between your new workplace and your old home. To claim your moving costs, your new place of employment must be at least 50 miles farther away from your old home than your old place of employment. For example, if you lived in a home that was 20 miles away from your old job, you'll have to take a job at a new company that is at least 70 miles away from your old home to qualify for the deduction.
If you're a member of the United States military, you can claim your moving expenses regardless of the distance or employment requirements if you're making a permanent change in your military status, such as retirement or termination of service.
Do military filers use Form 3903?
Military personnel should use Form 3903 to report their moving expenses:
- Shipping and storage costs for packing and moving your household goods and personal effects go on line 1 of Form 3903.
- Travel, lodging, and gas costs go on line 2.
- Reimbursements from your employer for any moving expenses are reported on line 4.
- Reimbursements for amounts on lines 1 and 2 that are not included in box 1 of your W-2 should also go on line 4.
If you’re looking at your W-2 to verify these amounts, the amount you report on line 4 should appear in box 12, code P. These directions are also included on Form 3903.
If your reimbursement exceeds your total out-of-pocket expenses, you won't be able to deduct your moving expenses, and you'll have to claim the excess reimbursement as taxable income. But if your personal expenses were more than the amount that you were reimbursed, you can deduct your out-of-pocket moving expenses to reduce your taxable income.
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