Background and why it matters

Federal law (after the Tax Cuts and Jobs Act of 2017) largely suspended the moving expense deduction for most taxpayers, leaving the item primarily available to active‑duty military (see IRS guidance on moving expenses and Form 3903). States reacted differently: some followed federal changes, others preserved pre‑2018 rules or created their own credits. Because states set their own income tax rules, a move can produce state tax benefits—or new state filing obligations—that differ from your federal return. (Authoritative sources: IRS, state Departments of Revenue, NASBO.)

How state rules typically work

  • Eligibility: States may require a job‑related reason, a distance test, or a minimum period of employment at the new location. Rules vary; some states grant credits, others allow deductions, and a few offer neither.
  • Eligible expenses: Commonly eligible costs include transportation of household goods, temporary storage, and travel to the new home. Costs for purely personal moves (no job or required reason) are often excluded.
  • Filing and documentation: States usually require receipts, moving company invoices, and proof of the move’s business purpose (job offer, employer letter, or military orders). Keep records for at least three years; some states keep longer audit windows.

Real-world examples and common state approaches

  • Decoupled states: Several states did not adopt the federal suspension and still allow moving deductions or credits under state law. Other states follow federal taxable income definitions and therefore disallow them.
  • Variations: One state might offer a refundable credit for qualifying movers, while another provides a nonrefundable deduction subject to limits. Local examples differ—always check your state’s revenue website.

Who is most affected

  • Employees who relocate for work and meet state distance/time tests.
  • Active‑duty military (federal benefit still applies and many states conform to military rules).
  • Remote workers, seasonal workers, and people who move mid‑year between states (can create multi‑state filing needs).

Practical documentation checklist (what to keep)

  • Moving company invoices and bills of lading
  • Receipts for packing supplies, storage, and travel (fuel, lodging)
  • Employer offer letter, transfer notice, or military orders showing the work‑related reason
  • Dates of residence change and proof (lease, utility setup, driver’s license)

Professional tips and strategies

  • Check both origin and destination state rules before you move; a mid‑year move can create tax obligations to two states. See our checklist on Tax Residency and Moving: Year‑of‑Move Checklist for guidance: https://finhelp.io/glossary/tax-residency-and-moving-year-of-move-checklist/
  • If you’re unsure whether your state allows deductions or credits, compare state rules with federal guidance in When You Can Claim Moving Expenses: Current Rules: https://finhelp.io/glossary/when-you-can-claim-moving-expenses-current-rules/
  • If you expect significant moving costs, run estimated tax projections for both states; some states offer credits for new residents or phase‑in rules that affect liability.
  • Keep digital and paper copies of records; audits frequently focus on proof of the move’s business purpose and detailed receipts.

Common mistakes to avoid

  • Assuming federal treatment equals state treatment—many states have different rules.
  • Failing to document the job connection or distance test.
  • Overlooking multi‑state filing obligations if you moved mid‑year.

When to consult a pro

Complex moves—business owners shipping equipment, frequent movers, or people who split tax years across states—benefit from a tax advisor. In my 15+ years advising clients, small documentation steps (an employer letter, dated receipts) often decide whether a state claim survives review.

Frequently asked questions

  • Are moving expenses deductible on state returns? It depends on the state; some allow deductions or credits, many follow federal suspension, and military moves are usually handled separately. See your state revenue site for specifics.
  • What if I moved for personal reasons? Most states exclude purely personal moves from deductions or credits.
  • How long should I keep records? Keep receipts and documents at least three years; some states have longer statutes of limitations.

Further reading and internal resources

Authoritative sources and notes

Professional disclaimer

This article is educational and does not replace personalized tax advice. State rules change; check your state Department of Revenue or consult a qualified tax professional for decisions specific to your situation.