What Counts as Moving Expenses for Taxes? Distance and Time Tests

Moving expenses for taxes are the reasonable costs of shipping your household goods and traveling to a new home for work-related reasons. Two things sit at the same level of importance as the definition itself: since 2025, only active-duty military members and certain intelligence community employees can deduct these costs on a federal return, and employer reimbursements for everyone else are now taxable wages. The One Big Beautiful Bill Act (P.L. 119-21) made the elimination of the civilian deduction permanent.¹

Even with the federal deduction closed to most people, the definition still matters. A few states allow their own deduction using the older federal rules, and employers routinely reimburse relocation costs that you now have to plan for as taxable income.

Costs That Count as Moving Expenses

Federal tax law recognizes two categories of qualifying moving expenses, and both must be reasonable and directly tied to the relocation.

Shipping Your Household Goods

The first category is the cost of getting your belongings from the old home to the new one. That covers professional movers, a rented truck or trailer for a self-move, packing supplies, professional crating, and shipping by road, rail, or air.² Insurance bought specifically to protect your belongings during the move counts too.

Temporary storage qualifies, but only within a narrow window: storage and insurance costs are deductible when the storage falls within 30 consecutive days after your goods leave the old home and before they arrive at the new one.³

Traveling to the New Home

The second category is the cost of moving yourself and your household. Lodging along the route, including the night you arrive, qualifies.² If you drive, you can deduct actual gas and oil, or use the standard mileage rate of 20.5 cents per mile for qualifying moves in 2026.⁴ Parking fees and tolls come on top of either method.

Airfare and train tickets qualify for each member of the household. Only one trip per person is deductible, so repeated back-and-forth travel between the two locations doesn’t count.⁵ Family members don’t have to travel together, but each person gets exactly one trip.

Costs That Do Not Count

Several costs that feel like natural parts of a move are specifically excluded. The biggest one is meals. Food during the trip is never a qualifying moving expense, no matter where or when you eat.² Keep lodging and meal receipts separate so you don’t accidentally combine them.

The IRS also excludes the following:⁶

Any part of the purchase price of a new home, closing costs, mortgage fees, points, real estate taxes, or losses on the sale of your old home.
Expenses for entering or breaking a lease, and forfeited security deposits.
Renovations to help sell the old home, or new carpet and draperies at the destination.
New car tags or a new driver’s license at the destination.
Side trips for sightseeing and any trips back to the former home.
Vehicle repairs, maintenance, insurance, or depreciation. Only gas and oil (or the standard mileage rate), parking, and tolls qualify.
Extravagant lodging beyond what is reasonable for the journey.

House-hunting trips are another common surprise. Scouting the new area before you move feels essential, but that travel doesn’t count.

Who Can Still Deduct Moving Expenses Federally

The Tax Cuts and Jobs Act of 2017 suspended the deduction for most taxpayers starting in 2018, and the One Big Beautiful Bill Act signed in 2025 made that elimination permanent.¹ Civilians who relocate for a job cannot deduct moving expenses on a federal return, regardless of the distance moved or how long they stay.

Two groups remain eligible:

Active-duty members of the Armed Forces who move on military orders tied to a permanent change of station. That covers moves from home to a first duty station, between permanent posts, and from a last post back home within one year of ending active duty (or within the time allowed by the Joint Travel Regulations). Spouses and dependents relocating under the same orders qualify as well.⁷
Employees and new appointees of the intelligence community who move because of a required change in assignment. Starting in 2026, they are treated similarly to military members for moving expense purposes.⁷

Both groups skip the distance and time tests that used to apply to all taxpayers. The order or assignment change is enough to establish eligibility.²

Employer Reimbursements Are Now Taxable Income

If your employer pays for or reimburses your relocation, that money is taxable wages. The One Big Beautiful Bill Act permanently ended the exclusion that once made employer-paid moving expenses tax-free, so those amounts appear in box 1 of your W-2 and are subject to income tax and payroll withholding.¹

The same military and intelligence community exception carries through here. Reimbursements paid to those employees remain excluded from gross income, but only up to what would have been deductible had the employee paid out of pocket.¹

If you’re a civilian receiving a relocation package, plan for the tax hit. Some employers add a “gross-up” payment to cover the tax on the reimbursement, but that is a negotiated benefit, not something the law requires.

State Deductions and the Older Federal Tests

A small number of states decoupled from the federal change and still allow a moving expense deduction on the state return. These states generally use the pre-2018 federal rules, which means the distance test and the time test both apply.

The Distance Test

Your new workplace must be at least 50 miles farther from your old home than your old workplace was. If your old commute ran 8 miles, the new workplace must sit at least 58 miles from the former home. With no previous workplace, the new one must be at least 50 miles from the old home. Distance is measured by the shortest commonly traveled route, not a straight line.²

The Time Test

You must work full time near the new location for a minimum period. Employees need at least 39 weeks of full-time work in the first 12 months. Self-employed people need at least 78 weeks in the first 24 months, with at least 39 of those falling inside the first 12.² Employee and self-employment weeks can be combined, and you don’t have to stay with a single employer. Disability, layoff or discharge (for reasons other than willful misconduct), and an employer-initiated transfer all waive the test.

Qualifying and disqualifying expenses at the state level typically mirror the federal categories described above: transport, in-transit storage up to 30 days, travel, and lodging count; meals, real estate transaction costs, and lease-breaking fees do not. State tax rules change often, so confirm the current instructions from your state tax authority before filing.

How Eligible Filers Claim the Deduction

Military members and intelligence community employees report their moving expenses on Form 3903. The form asks you to certify that the move meets the eligibility requirements.³ Household moving and storage go on one line, travel and lodging on another, and any reimbursement already included in your wages gets subtracted; the net deduction flows to Schedule 1 of Form 1040. If your reimbursement exceeds actual expenses, the excess is reported as additional income.

For a personal vehicle, you choose between actual gas and oil or the 20.5-cents-per-mile rate for 2026.⁸ Parking and tolls are added either way. Keep receipts or a mileage log regardless of the method you choose.

1
Internal Revenue Service. Publication 15-B (2026), Employers Tax Guide to Fringe Benefits
2
Office of the Law Revision Counsel. 26 USC 217 – Moving Expenses
3
Internal Revenue Service. Instructions for Form 3903
4
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents
5
eCFR. 26 CFR 1.217-2 – Deduction for Moving Expenses
6
Internal Revenue Service. 2025 Instructions for Form 3903 – Moving Expenses
7
Internal Revenue Service. Topic No. 455, Moving Expenses for Members of the Armed Forces and the Intelligence Community
8
Internal Revenue Service. Notice 2026-10 – 2026 Standard Mileage Rates