Are Moving Expenses Tax Deductible? What the Federal Rules Say

Are moving expenses tax deductible on a federal return?

For most people, no. According to the IRS, you can deduct moving expenses on a federal return only if you are a member of the Armed Forces on active duty who moves because of a military order and a permanent change of station, or, for moves in 2026 or later, an employee or new appointee of the intelligence community who moves because of a change in assignment that requires relocation.

That means the cost of hiring movers, renting a truck, buying boxes, or driving to a new home for a civilian job is a personal expense on a federal return, no matter how far you move or why.

This article is general information, not tax advice. Tax rules change and individual situations differ, so confirm anything that affects your return with a CPA, an enrolled agent, or the IRS.

What happened to the moving expense deduction

Before 2018, many people who relocated for a new job could claim a moving expense deduction if they met distance and time tests. The federal tax law passed at the end of 2017 suspended that deduction for most taxpayers, starting with the 2018 tax year, and it was written to expire after 2025.

It did not come back. The federal budget law enacted in 2025, often called the One Big Beautiful Bill Act, made the suspension permanent. It kept the exception for active-duty military and added one for members of the intelligence community, starting with tax years that begin after 2025. The same law made the matching rule for employer-paid moving costs permanent too.

Military moving expenses and Form 3903

The Armed Forces kept the deduction the whole time. The IRS says active-duty members may deduct unreimbursed moving expenses when the move is due to a military order and is a permanent change of station, and the deduction covers the member, a spouse, and dependents. Starting with moves in 2026, the IRS treats intelligence community employees and new appointees who relocate for a change in assignment the same way.

Key points on military moving expenses and Form 3903, from the IRS:

• It is an adjustment to income. You figure it on Form 3903 and claim it on Schedule 1 of Form 1040, so you do not have to itemize
• Household goods count. You can deduct the expenses of moving your household goods and personal effects, including qualifying storage
• Travel counts, with limits. Travel to the new home, including lodging, can be deducted. Meals cannot
• Mileage has a set rate. For 2025 returns, the IRS rate for using your vehicle to move is 21 cents a mile. For 2026, it is 20.5 cents a mile, rising to 23.5 cents a mile for travel on or after July 1, 2026
• No double dipping. You cannot deduct expenses that were paid for or reimbursed by the government

Because the military usually moves a service member's household goods or pays allowances for the move, the deduction mostly applies to out-of-pocket costs beyond what was covered. Your installation's tax center or a tax professional who works with military families can tell you what qualifies. For the move itself, see our guide to getting ready for a PCS.

Is an employer relocation reimbursement taxable?

This is the part that surprises people. The 2017 law that suspended the deduction also changed how employer-paid moving costs are treated, and the 2025 law made that change permanent. In general, money an employer pays toward a civilian employee's move is treated as taxable wages, subject to income and payroll taxes. That applies whether the company reimburses you, gives you a lump sum, or pays the moving company directly, and the amount typically shows up on your Form W-2. The same military and intelligence community exceptions apply here as well.

So when you ask, is an employer relocation reimbursement taxable, the working assumption for a civilian move is yes. What to do about it:

• Ask your employer how the relocation benefit will be reported and whether taxes will be withheld from it
• Ask whether the company offers a gross-up, which is extra pay meant to cover the tax on the benefit
• Get the relocation terms in writing, including any repayment clause if you leave the job early
• Tell your tax preparer about the benefit so there are no surprises at filing time

Our guide to what to ask for in a relocation package covers the negotiation.

State moving expense deduction rules can differ

State income tax law does not always follow federal law. When the federal deduction was suspended, some states did not adopt the change, which means a state moving expense deduction may still be available on a state return even though the federal one is not. Other states follow the federal rule, and some have no income tax at all.

If you are moving between states, you may also need to file part-year returns in both. Check the website of each state's tax agency, or ask a CPA who knows both states, before you assume anything in either direction.

What about moving a business?

The suspended deduction is about personal moves. A business that relocates its own office, equipment, or inventory is in a different category, and those costs are generally handled as business expenses under the usual rules. If you are self-employed and moving both your home and your business, the two sets of costs need to be kept apart.

Have your accountant decide how the costs are treated, and ask your mover for an itemized invoice that makes the split clear. Allpoints handles commercial and office moves, commonly on nights and weekends to limit downtime.

Moving expense records to keep anyway

Even without a federal deduction, a move generates paperwork you may need later. These are the moving expense records to keep for at least as long as you keep the tax return for that year:

• The moving estimate, the bill of lading, the inventory, and the final invoice
• Receipts for packing supplies, truck rental, storage, and travel
• Relocation agreements and reimbursement statements from your employer
• Military orders and travel vouchers, if you are in the service
• Receipts from charities for donated furniture and household goods. Donations may be deductible if you itemize, so ask your tax preparer
• Closing statements if you sold or bought a home
• Proof of the date you moved, which matters for state residency

How to lower the cost of a move without a deduction

If the tax code will not help, planning will.

• Move less. Long-distance pricing is based largely on distance and inventory. Sell, donate, or discard what you will not use
• Pick an easier date. Mid-week and mid-month dates outside summer give you the most choice
• Decide what to do yourself. You can pack your own boxes and still have a crew handle the furniture and the truck
• Get the price in writing. Our long-distance moves are quoted as a flat rate based on distance, inventory, and added services. Local moves are typically billed hourly
• Ask what is included. Read our rundown of hidden moving fees before you compare quotes
• Negotiate with your employer if the move is for work

Request a free, no-obligation quote and you will have a real number to plan around.