Are Moving Expenses Tax Deductible?

💸 Are Moving Expenses Tax Deductible? (And 6 Other FAQs)

If you’re preparing to relocate, you might wonder whether you qualify for a moving tax deduction—especially if your move is job-related. Whether you’re a W-2 employee or self-employed, understanding the latest tax rules can be confusing.

Recent changes in legislation surrounding relocation tax deductions (add link: relocation-tax) have left many people unsure about their eligibility.

Below, we break down the top FAQs to help you understand whether your moving expenses can be deducted—and how to prepare.

1️⃣ What Is a Moving Expense?

Moving expenses are considered an adjustment to income, not an itemized deduction. This means they reduce your adjusted gross income, which may help you qualify for other tax-related benefits.

If this is your first time relocating (add link: first-time-relocating), deductible moving costs might include:

🚚 Rental trucks or van fees

⛽ Mileage and gas

📦 Packing and temporary storage

🔐 Move-related insurance

🏨 One night’s hotel stay during the move

❌ Meals are never deductible.

The IRS allows a standard mileage rate of 17 cents per mile, or you can deduct actual costs with receipts.
Eligible relocation travel costs (add link: employee-relocation-costs) include:

Fuel and oil

Toll fees

Parking charges

2️⃣ Can You Deduct Moving Expenses in 2022 or Beyond?

For most taxpayers, moving expenses are not deductible from 2018 through 2025 due to the Tax Cuts and Jobs Act (TCJA) (add link: https://taxfoundation.org/tax-reform-explained-tax-cuts-and-jobs-act/).

Exceptions:

If your move occurred before 2018 and you didn’t claim a deduction, you may still be able to amend your tax return.

Active-duty military members are still eligible (see next section).

All other individuals must receive relocation reimbursements from their employer or a third party (add url: relocation-bonus-vs-relocation-reimbursement) to avoid out-of-pocket expenses.

You must also pass both the time test and distance test, outlined below.

3️⃣ Can Active Military Members Deduct Moving Expenses?

✅ Yes. Active-duty service members may claim deductions when the move is due to a Permanent Change of Station (PCS) (add link: dity-move-calculator).

Deductions apply to:

The military member

Their spouse

Dependents

These must be non-reimbursed expenses.

4️⃣ What Form Do Military Members Use?

Military personnel use IRS Form 3903 (add link: https://www.irs.gov/forms-pubs/about-form-3903) to report moving expenses.

📝 This includes:

Shipping and storage

Travel-related gas and hotel fees

If any relocation costs were reimbursed:

List them on Line 4 of Form 3903

Also report them in Box 12 (Code P) of your W-2

⚠️ If reimbursements exceed actual costs, the difference must be reported as taxable income.
If expenses exceed reimbursements, the excess is potentially deductible.

5️⃣ Do You Qualify for the Time Test?

To meet the time test, you must work full-time in the new location (add link: employee-relocation):

📅 Employees: 39 weeks during the first 12 months

💼 Self-employed: 78 weeks in the first 24 months, with at least 39 weeks in the first year

👩‍❤️‍👨 For married couples: only one spouse must meet the requirement

🩺 Delays for school or medical reasons are allowed under certain circumstances.

6️⃣ Do You Qualify for the Distance Test?

To meet the distance test:

📍 Your new job must be at least 50 miles farther from your old home than your previous workplace.

For example:

Old commute: 10 miles

New job must be at least 60 miles from your old residence

🚫 This test does not apply to military PCS moves or qualified exceptions like:

Involuntary termination

Medical relocation

Job loss-related moves

🧠 Final Thoughts

Today’s tax code limits who qualifies for moving expense deductions, making it important to understand your eligibility under the most recent IRS rules.

✅ Only active military personnel can typically deduct moving costs
✅ W-2 employees must rely on employer reimbursement
✅ Time and distance tests still apply for many deductions

📦 Planning a move? Don’t go it alone.
At CARS Relocation, we specialize in tax-compliant, stress-free relocation services.

📞 Contact us today to see how we can support your relocation and help you make the most of your benefits.