Are Moving Expenses Tax Deductible?

March, 27 2025 by Glynis Miller, CPA, MST

The ability to take a tax deduction for moving expenses could be described as the tale of the past, the present, and the future. Or, in a simpler fashion, yes, no, or maybe so. Prior to The Tax Cuts and Jobs Act of 2017 (TCJA), certain moving expenses could be deducted when a taxpayer took a new job and had to relocate their home due to that permanent job change. There were both time and distance requirements in order to deduct the related moving expenses. Presently, only certain military personnel who meet certain requirements can deduct certain ordinary and necessary moving expenses. In the future (after 2025), it is expected that the old rules will return to taxpayers who meet the specific requirements of the tax code. However, the tax code is forever changing, and the future deductibility of moving expenses should be considered uncertain at this time.
 

What Moving Expenses are Tax Deductible?

First, let us discuss what moving expenses can be deducted. There are two basic categories to consider for the moving expense deduction: travel expenses and costs associated with the moving of household goods and personal effects. Costs in both categories must be ordinary and necessary for the move and be considered reasonable.
 

Travel costs

Travel costs include airfare and lodging, but meals can never be included. The travel costs are generally allowed for you, your spouse, and dependent children. Each person is only allowed to deduct the reasonable travel for one trip from the old residence to the new one. In other words, it is not reasonable to attempt to deduct multiple flights back and forth as travel expenses, as multiple trips back and forth are not allowed.

If driving, travel expenses can include actual costs for gas and oil used in the car, or the standard mileage rate could be used instead. Currently, the mileage rate is 21 cents per mile. It should be noted that if traveling a long distance, any side trips along the way should not be included. Whether using the actual costs or standard mileage rate, tolls and any required parking fees can be added to the travel deductions.

Also included in travel expenses is any lodging required for long-distance moves. With lodging, it is important to remember that the expense must be considered reasonable. Therefore, as long as the lodging expenses are not considered lavish and extravagant and are not related to unnecessary side trips, they can be deducted.
 

Household goods and personal effects costs

Expenses for packing, crating, storing, and insuring household goods and personal effects from your old home to your new home are allowed. For storage and insurance costs, the expenses are allowed up to 30 days after the items have been removed from the old home. The days for storage and insurance must be consecutive and only include days before arriving at the new home. The costs allowable will not include travel, storage, and insurance coverage for any items that were purchased and transported while in transit to the new home.

If you pack your belongings yourself, include the cost of items such as required moving supplies, trucks, and trailers used for hauling your household goods. However, if you choose to use a packing and hauling service instead, be sure the costs are ordinary and necessary for the move so that you can deduct them. It is important to retain all the records to support the amounts you spend. The substantiation should include both receipts and proof of your payments.

 

Who is Allowed to Deduct Moving Expenses?

As noted, for tax years 2018 through 2025, only military personnel can deduct moving expenses when they meet certain requirements. The requirements state that the military personnel must be a member of the Armed Forces on active military duty.

The U.S. Armed Forces include the Air Force, Army, Coast Guard, Navy, Marines, and Space Force. These branches of the Armed Forces fall into four separate departments: the Department of the Air Forces houses the Air Force and Space Force, the Department of the Navy houses the Navy and Marines, the Department of the Army houses the Army, and the Department of Homeland Security houses the Coast Guard. However, during times of war, the Coast Guard will fall under the authority of the Department of Navy.
 

Active Duty

Active duty military members will fall into one of the branches noted above and are considered the first line of defense. They are employed full-time and assigned to one of the U.S. military installations, whether domestically or overseas. Domestic locations refer to the District of Columbia and the U.S.’s 48 contiguous states, often referred to as the Continental United States or CONUS. The remaining states of Alaska and Hawaii are included with U.S. territories as overseas installations Outside the Continental United States or OCONUS.
 

Non-Active Duty

Non-active duty military members serve in one of the branches noted above, except the Space Force, which currently has no reservist units. These military members can be called up to active duty to serve in any of the stations in the CONUS or OCONUS, but they are generally assigned to a duty station of their choosing, where they work on a part-time basis. These members of the Armed Forces would not generally qualify to deduct moving expenses. Civil Service employees working for the government are not considered on active duty.

 

Are Moving Expenses Tax Deductible for Retirees?

The U.S. Government employs both military and non-military personnel in connection with the operation of military installations. The non-military personnel are comprised of civilian staff, some of whom were former military personnel and others who never served. Upon retirement, many former activity duty military members have been known to accept employment in one of the civilian job opportunities. In general, retirees and non-civilian employees are not allowed to claim moving expenses. Please see the one exception noted under Permanent Change of Station related to an Armed Forces Member’s last post of duty as an active duty member.
 

Can You Deduct the Moving Expenses for a New Job?

As previously noted, the allowance of a moving deduction was, in fact, connected to a new job or relocation to a new job site. Also noted, this deduction is no longer allowed for the average taxpayer. Additionally, even for the qualifying active duty Armed Forces member, the move must be in connection with orders for a permanent change in duty station. Thus, while the work that is being conducted may be the same, the change in location represents a new job or job location.
 

Permanent change of station

In relation to a permanent duty station, three designations could qualify your moving expenses for a deduction due to a permanent change of station. The first and most obvious is a change from your most recent permanent post of duty to a new permanent post of duty. The other two classifications include the move from your home to your very first post of active duty and the move from your last post of active duty to your home.

Generally, when an individual joins the military, they first attend a boot camp for training prior to being assigned to a permanent post of duty. Thus, after enlisting in the military service and completing the basic training required, the service member will be provided with orders to report to a specific duty station. If the service member is required to move, they would be allowed to deduct the cost of travel and the moving of their household goods and personal effects from their home to their first active duty post station. Not all military service members remain in the Armed Forces for life; thus, upon the end of activity military service or retirement, a moving deduction may be available. The retiree or service member who is ending active duty may claim qualifying moving expenses from their last permanent duty station back to their original home or a nearer point in the U.S. This final move must generally occur within 1 year of the ending of active duty or other period allowed under the Joint Travel Regulations.

It should be noted that expenses related to a temporary change of duty station will not qualify for the moving deduction.
 

How do Employer Reimbursements Affect my Moving Deduction?

Even though you have qualified moving expenses, taking a deduction can be limited if your employer reimburses you for all or a portion of the expenses. Or if the expenses were paid by your employer directly to a third party, this is considered paid in kind for your benefit.

Generally, the government will pay for moving expenses directly to third parties. For the active duty member, the payment is generally not included in taxable income; thus, the expenses cannot be deducted from your tax return. However, when there is an amount reported on your W-2 in Box 12 with a code P, you will generally need to report the amounts as moving expenses to offset the reimbursement so that the amount is not included in gross income. If you paid for more qualifying expenses than you were reimbursed, you would receive a deduction for the excess amount paid over your reimbursement.

For non-active duty military members and civilian employees, any reimbursements or payments made in kind to third parties are included in taxable income. The military will generally issue you a separate travel W-2 for those moving expenses. The expenses have been properly included in taxable income, and since you are not considered active duty military personnel, you do not qualify to take a moving expense deduction. You can check the following DFAS link for any additional explanations of the changes that took place in 2018: https://www.dfas.mil/civilianemployees/civrelo/Civilian-Moving-Expenses-Tax-Deduction/
 

Can I Deduct Moving Expenses for My Business?

In general, if your expenses are considered ordinary and necessary for the operation of your trade or business, you can take a business deduction to offset the gross receipts from that same trade or business. Therefore, if you have expenses related to relocating your business as part of normal operations, these expenses would be reported on the appropriate business tax return. Self-employed sole proprietors generally report their trade or business expenses on Schedule C, which is attached to their Form 1040 U.S. Individual Income Tax Return.
 

Which States Allow the Moving Expense Deduction?

After the changes caused by the passing of the TCJA, only seven states allowed moving deductions or the exclusion of moving expenses from taxable income: Arkansas, California, Hawaii, Massachusetts, New Jersey, New York, and Pennsylvania. Please note that tax laws can change fairly quickly; thus, you should always check for the current rules of your state.
 

Deductible Moving Expenses

So, back to the original question: Are moving expenses tax deductible? The answer is yes, but only if you meet the requirements of one of the circumstances noted above. You are on active duty in the Armed Forces and have relocated due to PCS orders, with expenses that exceed your reimbursements. Or you recently joined the military or exited the military with either a move to your first permanent duty station assigned or a move from your last duty station back home.

Although TCJA has suspended the deduction for most taxpayers for tax years 2018 through 2025, some states may still allow moving deductions, so check to see if your state allows a deduction. Additionally, if you claim any moving expense deduction, be sure to retain your records. Lastly, business owners are able to deduct moving expenses when the expenses are considered ordinary and necessary for the operation of their trade or business.