Are Moving Expenses Tax Deductible? Who Qualifies, State Rules

For most people, moving expenses are not tax deductible on a federal return. The Tax Cuts and Jobs Act suspended the deduction starting in 2018, and a 2025 law made that suspension permanent. The only civilians with a federal write-off are active-duty members of the Armed Forces moving under orders and, beginning with the 2026 tax year, certain intelligence community employees relocating on assignment. A small group of states still lets everyone else deduct moving costs on a state return.¹

If you moved across the country in 2026 for a new job as a civilian employee or self-employed worker, none of your packing, shipping, travel, or lodging costs reduce your federal taxable income. Public Law 119-21 struck the sunset date from Section 217, so there is no scheduled year in which the old rules return.¹

Who Still Qualifies Federally

Active-duty service members keep the deduction as long as the move is the result of a military order and qualifies as a permanent change of station. That covers a move to your first duty assignment, a move from one permanent duty station to another, and a final move home within one year of ending active duty (or within the period the Joint Travel Regulations allow).² The old distance and time tests civilians once had to meet do not apply to military members with orders.

Starting with the 2026 tax year, employees and new appointees of the intelligence community also qualify when their assignment requires them to relocate. The intelligence community is defined by the National Security Act and includes agencies such as the CIA, NSA, and DIA. For moving expense purposes, these employees are treated the same as active-duty military.¹

What the Deduction Covers

For those who qualify, the deduction covers two categories: moving your belongings and getting yourself to the new home.²

Packing, crating, shipping, and in-transit insurance for household goods and personal effects.
Storage of household goods for any period of 30 consecutive days after they leave the old home and before they arrive at the new one.
Transportation and lodging for you and your household members during the move.
Vehicle costs if you drive, using either actual gas and oil expenses or the standard mileage rate. For 2026, the moving mileage rate is 20.5 cents per mile.³

Meals are not deductible at any point in the move, even on multi-day trips. Anything your employer reimburses or provides in kind cannot also be claimed as a personal deduction.²

How to Claim It

Qualifying filers use Form 3903 to calculate the deduction.⁴ The form is short. Enter transportation costs on one line, travel and lodging on another, subtract any employer reimbursements, and carry the result to Schedule 1 (Form 1040), line 14.⁵

This is an above-the-line deduction. It reduces adjusted gross income whether you take the standard deduction or itemize, and a lower AGI can help you qualify for other tax benefits that phase out at higher incomes. Keep your orders and receipts. Tax software will handle the transfer to Schedule 1 automatically once you enter the amounts.

Employer-Paid Relocation Is Taxable for Civilians

If your employer covers any part of your move and you are a civilian, every dollar counts as taxable wages. That includes direct reimbursements, lump-sum relocation bonuses, and moving services your employer pays for on your behalf. The amount is included in your W-2 wages and is subject to income tax and employment taxes.⁶

This surprises people. If your employer pays a moving company $8,000 to relocate you, your taxable income goes up by $8,000. Some employers “gross up” the payment, adding extra money to cover the tax you will owe on the benefit. Not all do. Ask before you accept a package.

The exclusion mirrors the deduction: active-duty military and intelligence community employees moving under orders can leave employer reimbursements out of income. For military members, excluded amounts appear under Code P in Box 12 of the W-2.⁷

States That Still Allow the Deduction

State tax rules do not always follow federal ones. As of 2026, roughly seven states still allow civilians to deduct moving expenses on state returns: California, New York, New Jersey, Massachusetts, Pennsylvania, Arkansas, and Hawaii. The details vary, and some states tie their rules to older versions of the federal code.

Where the deduction survives, states generally apply the tests the federal government used before 2018:

Distance test: the new workplace must be at least 50 miles farther from your old home than your previous workplace was.⁸
Time test: you must work full time for at least 39 weeks during the 12 months after the move. Self-employed filers must work 78 weeks over the first 24 months, with at least 39 in the first year.⁸

The deductible categories at the state level generally track the old federal ones: shipping household goods, storage, and travel including lodging but not meals. Some states have their own form; others use the federal Form 3903 structure. Check the instructions from your state’s department of revenue before filing, because the list of participating states can change and the mechanics differ.

In the roughly 40 states that adopted the federal suspension or have no state income tax, there is no state-level deduction available either.

If You’re Planning a Move

For most civilians relocating for work, moving costs come out of pocket with no federal tax relief. A few things still help. If your employer is offering relocation assistance, negotiate for a gross-up so the tax owed on the benefit does not catch you at filing time. If you are moving to a state that still allows the deduction, keep detailed records of packing, shipping, storage, mileage, and lodging even though those expenses will not appear on your federal return. And if you are self-employed, the moving expenses themselves are not deductible, but ordinary business costs of setting up a new office are a separate question governed by their own rules.

1
Office of the Law Revision Counsel. 26 U.S. Code 217 – Moving Expenses
2
Internal Revenue Service. 2025 Instructions for Form 3903
3
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents per Mile, Up 2.5 Cents
4
Internal Revenue Service. About Form 3903, Moving Expenses
5
Internal Revenue Service. Schedule 1 (Form 1040), Additional Income and Adjustments to Income
6
Internal Revenue Service. Publication 15-B (2026), Employer’s Tax Guide to Fringe Benefits
7
Internal Revenue Service. Frequently Asked Questions for Moving Expenses
8
Mass.gov. Massachusetts Moving Expense Tax Deduction