Certain individuals may be able to exclude from income the value of services and reimbursements received from an employer for moving expenses. If they are not reimbursed, they may be able to deduct expenses incurred when they moved.
For tax years through 2025, the moving expense deduction and the exclusion from gross income and wages for qualified moving expense reimbursements have been suspended and are not available for most taxpayers.
Exception: Active duty servicemembers of the Armed Forces (and their spouses and dependents) moving under military orders and incident to a permanent change of station can continue to claim the moving expense deduction and receive excludable moving expense reimbursements.
The exclusion applies only to reimbursement of moving expenses that the servicemember could deduct if he or she had paid or incurred them without reimbursement.
Service members of the Armed Forces can deduct moving expenses without meeting a time or distance tests if both of the following criteria are satisfied.
Permanent change of station (PCS). A permanent change of station includes:
Other circumstances. If you are the spouse or dependent of a service member of the Armed Forces who deserts, is imprisoned, or dies, a permanent change of station for you includes a move to:
If the military moves you to or from a different location than the service member, the moves are treated as a single move to your new main job location.
A foreign move is a move from the United States or its possessions to a foreign country or from one foreign country to another foreign country. A move from a foreign country to the United States or its possessions is not a foreign move. For a foreign move, the deductible moving expenses, described later, are expanded to include the reasonable expenses of:
Not deductible. Cost of meals while traveling, temporary living expenses, lavish or extravagant lodging, or house hunting expenses before or after the move.
Governmental provided moving services and allowances. Nondeductible expenses include:
The following expenses are not deductible as moving expenses.
Eligible moving expenses reimbursed by the government are excluded from your taxable wages. The amount of excluded moving expenses is reported in box 12, Form W-2 under code “P.” Do not deduct any expenses for moving services that were provided by the government. Also, do not deduct any expenses that were reimbursed by an allowance not included in income.
Additional moving expenses that are not reimbursed are eligible for a deduction on Schedule 1 (Form 1040) if they otherwise qualify.
The moving expense deduction is computed on Form 3903. See the Reporting Moving Expenses and Reimbursements chart, below, to determine how to compute the deduction for qualified expenses that exceed reimbursements and allowances (including dislocation, temporary lodging, temporary lodging expense, or move-in housing allowances that are excluded from gross income). The moving expense deduction is carried from Form 3903 to line 14, Schedule 1(Form 1040), as an adjustment to income. If you do not have any out-of-pocket unreimbursed moving expenses, there is no moving expense deduction allowed.
DISCLAIMER: This article contains general information for U.S. taxpayers and should not be relied upon as the only source of authority. Seek out professional tax, legal, or financial advice from CryptoTaxAudit or from other reputable companies.