The moving expense tax deduction is no longer available to most taxpayers. Under a change made permanent by the One Big Beautiful Bill Act in 2025, only two groups can still deduct the cost of relocating on a federal return: active-duty members of the Armed Forces moving under a permanent change of station order, and certain intelligence community employees who relocate because of a reassignment. Everyone else — civilians moving for a new job, a promotion, or a transfer — cannot claim these costs, and there is no scheduled date for the deduction to return.1Office of the Law Revision Counsel. 26 USC 217 – Moving Expenses
Who Can Still Claim the Deduction
Active-duty service members qualify when the move happens because of a military order tied to a permanent change of station. That includes the move from home to a first duty post, a move between duty stations, and the move from a final post back home after separation. The deduction covers the service member, spouse, and dependents named on the orders.1Office of the Law Revision Counsel. 26 USC 217 – Moving Expenses
Military filers do not have to meet a distance test or a minimum weeks-worked test at the new location. An official PCS order is the only trigger.1Office of the Law Revision Counsel. 26 USC 217 – Moving Expenses
The 2025 law added intelligence community employees and new appointees to the eligible group. If your move happens because of a reassignment that requires relocation, you are treated the same as an active-duty service member for this deduction. “Intelligence community” uses the definition from the National Security Act of 1947.1Office of the Law Revision Counsel. 26 USC 217 – Moving Expenses
What You Can Deduct
Deductible costs fall into two buckets: moving your belongings and traveling to the new home.
For household goods, you can deduct professional packing, crating, and shipping. Storage and insurance also qualify if the charges fall within 30 consecutive days after your things leave the old home and before delivery to the new one.2Internal Revenue Service. Instructions for Form 3903 For a foreign move, that 30-day cap does not apply. If you are stationed overseas, storage is deductible for the whole period the foreign location is your principal workplace.3eCFR. Deduction for Moving Expenses
For travel, lodging along the route is deductible for you and your household. If you drive, you can either track actual gas and oil costs or use the IRS standard mileage rate. The moving mileage rate for the 2026 tax year is 20.5 cents per mile.4Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents Pick one method per vehicle; you cannot use both on the same move.
What You Cannot Deduct
Several costs stay off the form even for eligible filers:
- Meals purchased during the trip to the new home, no matter how long the drive takes.2Internal Revenue Service. Instructions for Form 3903
- House-hunting trips before the actual move.
- Closing costs, real estate commissions, or any part of a new home’s purchase price.
- Fees for breaking a lease or deposits on a new rental.
- Storage past the 30-day window for domestic moves.2Internal Revenue Service. Instructions for Form 3903
The rule of thumb: costs directly tied to physically moving people and belongings are in; costs tied to finding, buying, selling, or settling into housing are out.
How Employer Reimbursements Are Taxed
If you are a civilian and your employer pays for your move, the full reimbursement is taxable income. It appears on your W-2 and is subject to income tax and payroll withholding. The 2025 law permanently ended the exclusion that used to let employers cover these costs tax-free.5Internal Revenue Service. Publication 15-B (2026), Employers Tax Guide to Fringe Benefits
For active-duty military moving under PCS orders and for intelligence community employees relocating under a change in assignment, reimbursements stay excludable from income. The exclusion only covers expenses that would have been deductible on Form 3903 had the employee paid out of pocket, so an employer reimbursement for meals or a house-hunting trip is still taxable, even for eligible filers.5Internal Revenue Service. Publication 15-B (2026), Employers Tax Guide to Fringe Benefits
How to File Form 3903
Eligible filers report moving expenses on IRS Form 3903. Line 1 captures the cost of transporting household goods, including packing, shipping, and eligible storage. Line 2 covers travel and lodging for you and your household. Line 3 adds the two. Line 4 asks for any government reimbursements not already included in your W-2 wages. Line 5 is the net deduction after subtracting those reimbursements.2Internal Revenue Service. Instructions for Form 3903
The Line 5 amount goes on Schedule 1 of Form 1040 as an adjustment to income.6Internal Revenue Service. Topic No. 455, Moving Expenses for Members of the Armed Forces and the Intelligence Community Because it is above-the-line, it reduces your adjusted gross income whether you itemize or take the standard deduction. Keep your PCS orders or reassignment paperwork along with receipts for every expense. Misreporting on Form 3903 can trigger the IRS accuracy-related penalty of 20% of the resulting tax underpayment.7Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments
State Returns May Still Allow the Deduction
Federal rules do not bind state income tax. Some states did not follow the federal suspension and still let civilians deduct moving costs on their state return, generally using the pre-2018 federal tests: the new workplace at least 50 miles farther from the old home than the previous workplace was, and full-time work at the new location for at least 39 weeks during the year after the move. Availability, dollar caps, and qualifying rules vary, so check with your state’s department of revenue before counting on it.