When You Can Claim Moving Expenses: Current Rules

Quick answer — who still qualifies

As of the 2025 tax year the Tax Cuts and Jobs Act (TCJA) suspended the federal moving‑expense deduction for most taxpayers. The primary exception is active‑duty members of the U.S. Armed Forces who move because of a permanent change of station (PCS). Those service members may still deduct qualifying moving expenses on their federal return by using IRS Form 3903 and the guidance in IRS Publication 521 (Moving Expenses) (IRS Pub. 521).

Below I summarize the current federal rules, practical examples, recordkeeping best practices, how employer reimbursements are treated, state considerations, and frequently made mistakes I see in practice.

What counts as a qualifying move for tax purposes?

• Qualifying taxpayer: Active‑duty members of the U.S. Armed Forces moving under a permanent change of station. Civilians — including employees who move for a job — generally cannot claim the federal moving‑expense deduction for tax years 2018 through 2025, unless Congress changes the law after 2025. (IRS Pub. 521).
• Timing and reason: The move must be directly connected to your military orders (PCS). Temporary moves or moves unrelated to a PCS order typically don’t qualify.

Source: IRS Publication 521 and Form 3903 (see IRS for full rules).

What expenses are eligible for deduction (military PCS moves)?

Eligible moving costs for qualified service members typically include:

• Transportation and storage of household goods and personal effects (truck rental, moving company charges, storage fees for a limited period).
• Travel expenses for the service member and their household, such as airfare or mileage for driving (note: meals are not deductible).
• Temporary lodging expenses incurred while moving may qualify for a limited period when directly tied to the move.

Expenses that are not deductible include costs for house hunting, breaking a lease (unless specified by orders or contract), utility reconnection fees, new driver’s licenses, and meals during travel. For a full list and definitions, refer to IRS Pub. 521 and instructions for Form 3903.

How to report qualifying moving expenses

Qualified service members use IRS Form 3903 to list and calculate allowable moving expenses. The net deductible amount is carried to your Form 1040 as an adjustment to income in the place designated by the form instructions. Even though this is a specific military exception, you should attach Form 3903 and keep backup documentation in case of IRS questions.

IRS resources: Form 3903 (About Form 3903) and Publication 521.

Employer reimbursements and tax treatment

• For most civilian employees: Moving reimbursements paid by employers are treated as taxable income and reported on Form W‑2 (effective with TCJA). In practice this means a lump‑sum relocation benefit from an employer is generally taxable compensation unless the law changes.
• For military members: Certain reimbursements and per diem payments tied to official PCS moves may be nontaxable under special rules; confirm treatment with your finance office or a tax advisor and check IRS guidance.

If your employer furnishes moving assistance, ask whether they report it as wages. If they do, tax may already have been withheld.

State tax differences to check

Some states decouple from federal changes and may still allow a moving‑expense deduction or favorable treatment for employer reimbursements. Before you assume you cannot claim anything at the state level, check your state tax rules or the state‑specific guidance. For state issues related to residency and tax liability after a move, see our piece: “State Residency and Income Tax: Moving Without Surprises.” (finhelp.io)

Internal link: State Residency and Income Tax: Moving Without Surprises — https://finhelp.io/glossary/state-residency-and-income-tax-moving-without-surprises/

Real‑world examples (illustrative, not tax advice)

Example 1 — Military PCS: Specialist A receives orders to move 800 miles to a new base. She hires a moving company to transport household goods ($2,200), pays storage for two weeks ($150), and buys airline tickets for her family ($900). She documents receipts and mileage, completes Form 3903, and deducts the qualifying amounts on her federal return.

Example 2 — Civilian job move (post‑TCJA): Alex accepts a new job and relocates. His employer offers a $6,000 relocation package. Unless his employer treats some payments under an accountable plan (rare post‑TCJA) or the state provides relief, Alex generally must include the $6,000 in taxable wages on his W‑2. He cannot deduct his moving costs on his federal return for tax years 2018–2025.

Practical recordkeeping checklist

Good documentation makes the difference between a clean filing and an audit headache. Keep:

• All receipts and invoices for movers, storage, travel, and temporary lodging.
• A mileage log (date, miles, origin/destination) if you drove your vehicle.
• Copies of military orders (PCS orders) that tie the move to official duty.
• Employer communications about relocation benefits (offer letters, reimbursement policies).
• A running spreadsheet or scanned folder so you can easily attach supporting documents if requested.

In my practice advising service members, the strongest audit defense is contemporaneous documentation (receipts, orders, and a clean Form 3903). Without that paper trail, you risk disallowed deductions.

Common mistakes I see

• Assuming all job‑related moves are deductible — they are not for civilians under current federal law.
• Attempting to deduct meals associated with travel — meals are explicitly excluded.
• Mixing employer‑paid reimbursements into your deductions without verifying taxability — many civilians have these amounts taxed as wages.
• Failing to keep PCS orders or adequate receipts — missing documents are the single biggest problem when a return is examined.

What to do if you received taxable reimbursements

If your employer included a relocation reimbursement in your wages, you may still be able to negotiate tax‑grossed benefits in a job offer or ask HR about timing of payments. Consult a tax professional about potential withholding adjustments or timing strategies, but remember that federal law currently treats these as taxable income for civilians.

When might the rules change?

The TCJA provisions suspending the civilian moving expense deduction are scheduled through tax year 2025. Whether the deduction returns for 2026 and beyond depends on future legislative action. Stay updated via the IRS website and trusted tax professionals.

Related reading on FinHelp

• “When Moving for Work Is Tax Deductible” — a deeper look at pre‑TCJA rules and scenarios where state or employer treatment matters: https://finhelp.io/glossary/when-moving-for-work-is-tax-deductible/
• “Deducting Moving Expenses: Who Still Qualifies” — focused guidance on eligibility and edge cases: https://finhelp.io/glossary/deducting-moving-expenses-who-still-qualifies/

Bottom line and next steps

• If you’re an active‑duty service member moving under PCS orders: document everything and use Form 3903; these expenses remain deductible.
• If you’re a civilian: for tax years 2018–2025 you generally cannot deduct moving expenses on your federal return; employer reimbursements are usually taxable. Check your state rules and employer policy.

Professional disclaimer: This article is educational and reflects federal rules as of 2025; it is not personalized tax advice. For decisions that affect your tax situation, consult a licensed tax professional or contact the IRS directly. Authoritative sources used: IRS Publication 521 and Form 3903 (IRS.gov), and Consumer Financial Protection Bureau guidance on relocation costs. Additional state and employer rules may apply.