Moving to a new home can be both exciting and stressful, especially when considering the financial impact. If you’re relocating for work, you might be wondering if any of those expenses could help reduce your tax bill. As of 2025, most taxpayers cannot deduct moving expenses due to the Tax Cuts and Jobs Act of 2017, which suspended this deduction until 2025 for everyone except active-duty military members moving due to military orders.
For military members who qualify, the IRS allows deductions for reasonable moving expenses including transportation, storage, and travel costs. The move must be connected to a permanent change of station, and you can calculate these deductions using Form 3903, Moving Expenses. Before 2018, civilians could also claim this deduction if they met certain distance and time requirements.
While most taxpayers must wait until at least 2026 for potential reinstatement of this deduction, it’s worth understanding the historical requirements that might apply in the future. Previously, your new workplace needed to be at least 50 miles farther from your former home than your old job was, and you had to work full-time for a certain period after the move.
Key Takeaways
- Moving expenses are currently only tax-deductible for active-duty military members through 2025.
- Qualifying military relocations must be connected to a permanent change of station.
- If reinstated after 2025, civilian moving expense deductions will likely require meeting specific distance and time requirements.
Understanding Eligibility for Moving Expense Deductions
Moving expenses tax deductions have specific eligibility criteria that you must meet before claiming them on your tax return. The IRS evaluates your qualification based on two primary tests: distance and time.
Distance Test Explained
To qualify for moving expense deductions, your new workplace must be at least 50 miles farther from your old home than your previous job location was. This is often referred to as the “50-mile rule.”
For example, if your old job was 10 miles from your previous home, your new job location must be at least 60 miles from that same home to qualify. The IRS measures this using the shortest commonly traveled routes.
For first-time job holders, the new workplace simply needs to be at least 50 miles from your old residence. Military members may have different requirements depending on whether the move is due to a permanent change of station.
Remember that this test applies to each person in the household independently – if you and your spouse both work, you each need to meet the criteria separately.
Time Test Requirements
After relocating, you must work full-time for at least 39 weeks during the first 12 months in your new location to qualify for the deduction. Self-employed individuals face stricter requirements – you must work 78 weeks during the first 24 months.
The weeks don’t need to be consecutive, but they must be full-time according to the standards in your industry. Time spent on vacation, approved leave, or seasonal work disruptions still counts toward your total.
If you haven’t met the time requirement by your filing deadline, you can still claim the deduction if you expect to fulfill it. However, if you later fail to meet the requirement, you’ll need to either:
- Report the deduction as income on your next return
- File an amended return without the deduction
Certain exceptions exist for disability, job termination, or death, where the IRS may waive the time test requirement.
Deductible and Non-Deductible Moving Expenses
Understanding which moving expenses you can deduct on your taxes has changed significantly in recent years. For most taxpayers, moving expenses are no longer deductible on federal returns from 2018 through 2025, with exceptions for active-duty military personnel.
Travel and Accommodation
When it comes to travel expenses related to moving, the rules are quite specific. If you’re an active-duty military member who qualifies for the deduction, you can include costs for transportation and lodging for yourself and household members.
The IRS allows you to deduct either:
- Actual expenses: Gas, oil, parking fees, and tolls when using your vehicle
- Standard mileage rate: A fixed rate per mile for moving purposes
What you cannot deduct:
- Meals during your journey
- Pre-move house-hunting expenses
- Return trips to your former residence
- Side trips for sightseeing or other personal activities
If you’re driving to your new location, keep detailed records of your mileage and receipts for any lodging. Remember that the most direct route is what the IRS expects you to take for deduction purposes.
Packing, Shipping, and Storage
The costs associated with packing, crating, and transporting your belongings form the core of potentially deductible moving expenses for qualifying military personnel.
Potentially deductible expenses include:
- Packing materials and containers
- Moving company fees
- Cost of shipping your household goods and personal effects
- Storage fees for up to 30 consecutive days after moving from your former home
- Insurance for your belongings during the move
Your pets are considered part of your household, so the cost of shipping them to your new home is also potentially deductible. However, moving expenses for non-military taxpayers are not deductible until at least 2026.
To claim these deductions if eligible, you’ll need to complete IRS Form 3903 and attach it to your tax return.
Utilities and Insurance
When it comes to utilities and insurance, the tax treatment is generally straightforward—these costs are typically not deductible as moving expenses, even for those who qualify for moving expense deductions.
Non-deductible utility expenses include:
- Connection and disconnection fees
- Deposits required by utility companies
- Early termination fees for services at your old home
Similarly, homeowner’s or renter’s insurance premiums at your new residence don’t qualify as deductible moving expenses. The one exception relates to insurance specifically purchased to protect your belongings during the actual move.
You should keep in mind that some states still allow moving expense deductions on state tax returns, even when they’re not deductible federally. Check with your state tax authority or a tax professional to see if you might qualify for state-level deductions.
Claiming Tax Deductions for Moving Expenses
Understanding how to properly claim moving expense deductions can significantly impact your tax situation, though the 2017 Tax Cuts and Jobs Act has temporarily suspended this benefit for most taxpayers until 2025, with exceptions for active military personnel.
Required Documentation and Receipts
When claiming moving expenses, proper documentation is your best friend. The IRS expects you to maintain detailed records of all qualifying expenses for at least three years after filing your return.
Essential documents to keep include:
- Receipts for all moving-related expenses
- Bills from moving companies
- Storage fee receipts (for up to 30 consecutive days)
- Lodging receipts during transit
- Gas receipts or mileage logs if using your vehicle
- Documentation showing the distances between your old home, new home, and workplace
You’ll need to demonstrate that your move meets the 50-mile distance test from your previous location. This means your new workplace must be at least 50 miles farther from your old home than your previous workplace was.
Don’t forget to keep proof of employment at your new location, as the IRS may request verification that you satisfy the time test requirements.
For Self-Employed Taxpayers
Self-employed individuals face unique considerations when claiming moving expense deductions. You must work full-time at your new location for at least 39 weeks during the first 12 months after arriving, or 78 weeks during the first 24 months if self-employed.
If you run your own business, maintain clear separation between:
- Business relocation expenses (deductible as business expenses)
- Personal moving expenses (potentially deductible on Form 3903)
Track your time meticulously to prove you meet the time test requirements. A detailed calendar or time-tracking system can be invaluable if audited.
Self-employed individuals should maintain thorough records connecting the move to business necessity. This includes documentation of clients, projects, or business opportunities in the new location that necessitated the relocation.
Remember that if you received any reimbursements, these must be properly accounted for on your tax return.
Reporting Moving Expenses to the IRS
To claim moving expenses, you’ll need to complete IRS Form 3903 and attach it to your federal tax return. This form is relatively straightforward but requires careful attention to detail.
On Form 3903, you’ll report:
- Transportation and storage costs (Line 1)
- Travel and lodging expenses (Line 2)
- Reimbursements received (Line 4)
The resulting amount flows to the “Adjustments to Income” section of your tax return, making it an “above-the-line” deduction that reduces your adjusted gross income. This is advantageous since you don’t need to itemize to benefit.
If you’re active military moving due to a permanent change of station, make sure to check the appropriate box on Form 3903. You should calculate your estimated tax payments accounting for both deductible moving expenses and any taxable reimbursements you received to avoid penalties for underpayment.
Frequently Asked Questions
Moving can be complicated, and tax implications add another layer of complexity. Here are answers to common questions about moving expenses and tax deductions that can help clarify your specific situation.
What are the criteria for deducting moving expenses on federal taxes?
Prior to 2018, you could deduct moving expenses if you moved at least 50 miles away for work. The distance between your new workplace and your former residence needed to be at least 50 miles more than the distance between your old workplace and former residence.
You also needed to satisfy a time test by working full-time for at least 39 weeks during the first 12 months after arriving at your new location. Self-employed individuals had to work for 78 weeks during the first 24 months.
Eligible expenses typically included transportation of household goods, travel to your new home, and storage costs.
How has the tax reform affected deductions for moving expenses?
The Tax Cuts and Jobs Act of 2017 suspended the moving expense deduction for most taxpayers from 2018 through 2025. This means that for tax years 2018-2025, moving expenses are generally no longer deductible on your federal tax return.
This suspension applies to both the deduction for moving expenses and the exclusion from income for employer-paid moving expense reimbursements. The change represented a significant shift in tax policy regarding relocation costs.
Are there any circumstances where moving expenses are still deductible for federal taxes?
Yes, there is an important exception. If you’re an active-duty member of the U.S. Armed Forces moving due to a permanent change of station, you can still deduct unreimbursed moving expenses.
A permanent change of station includes moves from your home to your first post of active duty, from one permanent post to another, and from your last post to your home or a nearer point in the United States. This military exception was specifically preserved in the tax reform legislation.
Which states offer deductions for moving expenses and how do they differ?
Even though federal deductions are limited, some states still allow moving expense deductions on state tax returns. California, for example, still permits qualified taxpayers to claim moving expense deductions on their state returns.
The rules vary significantly by state. Some follow federal guidelines as they existed before 2018, while others have their own criteria. States like New York and Massachusetts have different approaches to handling moving expenses on state returns.
You should check with your specific state’s tax authority or consult with a tax professional familiar with your state’s tax laws to determine eligibility.
What documentation is required to support moving expense deductions on your tax return?
For states where moving expenses remain deductible (or for federal returns if you’re military), you should maintain comprehensive records. Keep all receipts related to your move, including costs for moving companies, rental trucks, packing supplies, and travel expenses.
You should also document the dates of your move, employment verification showing when you started work at the new location, and proof of address for both your old and new homes. Many taxpayers use IRS Form 3903 to calculate moving expenses, even for state returns.
Maintaining a mileage log if you drove your own vehicle is also important, as you may be able to deduct mileage at the IRS-approved rate for moving purposes.
How do moving expense deductions apply to self-employed individuals?
Self-employed individuals face different requirements when claiming moving expense deductions in jurisdictions where they remain available. The time test is more stringent: you must work full-time for at least 78 weeks during the first 24 months after arriving in the new location.
You can still claim the same types of expenses as regular employees, including transportation of household goods, travel costs, and temporary storage. Keep detailed records of all business activities and time worked to substantiate that you meet the time test requirements.
For self-employed individuals who work from home, the distance test is based on the location of your home office, which must qualify as your principal place of business for tax purposes.