You never realize how much stuff you have until you have to pack it all up and move.
Moving is always considered a stressful and expensive task. Whether it’s due to a job change, a new adventure, or just a need for a fresh start, the process of packing up your entire life and relocating can come with a lot of stress—and costs.
It’s not just the price of hiring movers or renting a truck; there are hidden expenses like gas, packing materials, temporary housing, and storage fees.
All these costs can add up quickly, making people wonder if there’s some relief available when tax season rolls around.
And let’s be honest—who wouldn’t want to save a little money after spending so much on a move?
But here’s the catch: the IRS rules for deducting moving expenses have changed drastically in recent years.
According to the IRS, before 2018, about 11 million Americans moved annually, and many of them claimed moving expenses on their tax returns. The Tax Cuts and Jobs Act (TCJA) of 2017 changed everything by suspending the moving expenses deduction for most taxpayers until at least 2025.
Now, unless you’re an active-duty military member moving due to a permanent change of station, the moving expense deduction has been eliminated for federal tax purposes.
This change has confused many taxpayers, especially since most states have different rules. For instance, states like California and New York still allow for certain moving expenses to be deductible even if they aren’t at the federal level.
With these shifting rules and exceptions, it's important to get the full picture of whether “moving expenses are tax deductible” or not.
Let’s get into the details to make sure you have everything you need to know about claiming moving expenses on taxes and whether you might still qualify under special circumstances.
Conditions to Qualify for Moving Expense Deductions
When it comes to figuring out if your moving expenses are deductible, there are three main conditions that you need to meet:
The move is work-related.
The distance test is satisfied.
The time test is met.
Is Your Relocation Work-Related?
Let’s start with the basics—did you move because of your job?
If so, then you’re already on the right track!
Moving for work or a closely related reason is one of the biggest qualifiers for a potential deduction on your next year’s tax return.
What does this mean exactly? If your move is closely tied to the start of a new job or a transfer, you are eligible to deduct moving expenses that occurred within one year of your move.
Did you know that you could still qualify for this deduction even if you moved before finding your new job?
Yep, you heard that right! As long as the move was made to get you closer to a new place of employment and happened within one year, you’re good to go.
Just one catch: if your employer reimbursed you for these moving costs, then you’re not eligible to claim those expenses again on your taxes.
This only applies if the expenses come out of your own pocket. If that's the case, you'll need to attach Form 3903 when filing your return.
Do You Meet the Distance Test?
The distance test can be a bit tricky to understand at first, but it’s key.
The rule states that your new job must be at least 50 miles farther from your old home than your previous job location.
So, let’s break that down with an example:
Imagine you used to work 15 miles away from your old home. To qualify for the moving expense deduction, your new job must be at least 65 miles from your old home (15 + 50 miles).
It’s not about how far your new home is from the old one—it’s about the distance between your old home and your new place of work.
Keep those receipts handy because you’ll need detailed documentation to back up your claim if the IRS asks for proof. 
Understand the Time Test
The time test sounds like a countdown, right? But it’s pretty straightforward.
To pass the time test, you need to work full-time for at least 39 weeks during the first 12 months at your new job.
If you’re self-employed, the requirements are a bit stricter—you need to work 78 weeks within the first 24 months.
Here's the good news: you don't have to work all of those weeks consecutively. So, if you start your new job mid-year, you can still meet the time test by the following tax year.
If you didn’t meet the time test by the end of the year but expect to meet it next year, you can still claim the deduction now and amend your return if you don’t end up meeting the criteria later.
These conditions might seem like a lot to remember, but they're crucial in determining whether you qualify for a moving expense deduction.
Remember, tax rules can be complicated, so it’s always a good idea to consult with a tax professional, especially when dealing with something as complex as moving expenses!
Who Can Still Deduct Moving Expenses?
If you are an active-duty military member who is moving because of a permanent change of station (PCS), you’re in luck!
You can still deduct the reasonable costs of moving yourself, your spouse, and your dependents. The eligible expenses include:
- Costs of moving household goods and personal effects.
- Travel expenses to your new home, including lodging (but not meals).
If you qualify, you'll need to fill out Form 3903, "Moving Expenses," calculate your deduction and attach it to your federal income tax return.
What’s No Longer Deductible?
For the rest of us, moving expenses are no longer deductible unless you meet the strict criteria mentioned above.
This means even if you are moving for a new job or relocating to a different state for work, you can’t deduct those costs on your federal return.
This includes expenses like hiring movers, packing supplies or transporting your belongings to a new place.
Claiming Moving Expenses on Taxes
Now, if you do meet the requirements (like being an active-duty service member), you can still claim moving expenses on your taxes.
Here’s a quick rundown of what you can and cannot include:
What you can deduct:
Transportation of household goods: This covers costs like packing, crating, and hauling your belongings.
Storing and insuring items: You can deduct the cost of storing your household goods and personal effects for up to 30 days after moving out of your previous home.
Travel expenses: This includes travel from your old home to your new home. You can deduct lodging costs for yourself and family members, but not meals.
What you can’t deduct:
Costs for selling your old home or buying a new one.
Any losses from selling your home.
The cost of any house-hunting trips.
Temporary living expenses in your new location.
Expenses reimbursed by your employer.
How to Report Moving Expenses to the IRS
If you are eligible, you’ll report these expenses using Form 3903.
The form requires you to detail your moving expenses, and the amount will then be entered on your tax return (Form 1040).
Make sure you keep detailed records and receipts for any moving expenses, as you will need them if the IRS requests documentation.
State-to-State Moving Expenses Tax Rules
While the federal tax laws have changed, some states still allow deductions for moving expenses. States like California and New York have their own rules that may differ from federal guidelines.
For example, in California, certain taxpayers can still deduct moving expenses on their state returns, even if they are not deductible at the federal level.
Always check with your state's tax authority or a local tax professional to understand the rules specific to your state.
