The moving expense deduction used to be available to millions of Americans who relocated for work. The Tax Cuts and Jobs Act of 2017 largely eliminated it — but not entirely. Here’s who can still claim the moving expense deduction in 2025 and how to do it.
What Changed in 2018
Before 2018, workers who moved at least 50 miles for a new job and met a time-worked test could deduct qualifying moving expenses as an above-the-line deduction. This was a valuable benefit for anyone relocating for employment.
The Tax Cuts and Jobs Act (TCJA) suspended this deduction for most taxpayers for tax years 2018 through 2025. The deduction is scheduled to return in 2026 when the TCJA provisions expire, but Congress may act to extend the suspension. For 2025, most people cannot claim a federal moving expense deduction.
Who Can Still Deduct Moving Expenses in 2025
Active Duty Military Members
The TCJA specifically preserved the moving expense deduction for active duty members of the U.S. Armed Forces (and their spouses and dependents) who move pursuant to a military order or permanent change of station (PCS). If you are active duty military and your move was ordered by the military, you can still deduct qualifying moving expenses on IRS Form 3903.
Qualifying moving expenses for military members include: the cost of moving household goods and personal effects (including in-transit storage for up to 30 days), and travel expenses (including lodging but not meals) while traveling to the new home. The deduction covers the reasonable costs of a move — you cannot deduct lavish or extravagant expenses.
State Tax Returns May Still Allow the Deduction
Several states did not conform to the TCJA suspension of the moving expense deduction and still allow it on their state income tax returns. California is the most notable example — California continues to allow moving expense deductions for taxpayers who meet the distance and time tests that applied pre-TCJA. Other states that may still allow moving deductions include New York, Pennsylvania, and others that use pre-TCJA federal conformity.
If you moved for work in 2025, it’s worth checking your specific state’s rules, as a state deduction may still be available even if you can’t claim it federally.
What Counts as a Deductible Moving Expense (For Those Who Qualify)
For active duty military who qualify, deductible moving expenses include: the cost of packing and moving household items and personal property; storage costs for up to 30 consecutive days after moving out; transportation and lodging costs for the move itself (for you and household members); and the cost of connecting or disconnecting utilities required because of the move.
You cannot deduct: meals during the move; any part of the purchase price of a new home; losses on the sale of your old home; expenses for buying or breaking a lease; home improvements to help sell your old home; or travel costs for house-hunting trips before the move.
Employer Moving Reimbursements and Taxes
Before 2018, employer reimbursements for qualifying moving expenses were excluded from taxable income. Under the TCJA, this exclusion was also suspended through 2025 (with the same military exception). This means that if your employer pays for your move or gives you a relocation bonus, that money is generally treated as taxable wages and included in your W-2 — even if you use it entirely for the move. Effectively, many employers now “gross up” relocation payments to cover the taxes employees owe.
Looking Ahead to 2026
If Congress does not act to extend the TCJA, the moving expense deduction is scheduled to return in 2026 for taxpayers who meet both the distance test (new workplace must be at least 50 miles farther from the old home than the old job was) and the time test (work full time for at least 39 weeks during the 12-month period after arriving in the new area). Whether this sunset actually occurs is uncertain — watch for legislative changes.
The Bottom Line
For most taxpayers in 2025, the federal moving expense deduction is not available. The main exception is active duty military members moving under orders. However, if you live in a state that hasn’t conformed to the TCJA suspension, you may still have a state-level deduction. And if your employer reimburses relocation costs, be aware that those reimbursements are typically taxable income under current law.
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