The moving expense deduction was significantly curtailed by the Tax Cuts and Jobs Act of 2017. For most Americans, it no longer exists at the federal level. But it still applies in two important situations — and many states continue to allow it where the federal government doesn’t. Here’s who still qualifies, what the deduction covers, and the state-specific rules that apply to millions of movers.
What Happened to the Moving Expense Deduction?
Before 2018, employees and self-employed individuals who moved for work could deduct qualifying moving expenses above the line, reducing their AGI. The TCJA eliminated this deduction for all filers except active-duty military, effective tax years 2018 through 2025. The suspension was originally set to expire after 2025 — current law has extended it through 2025, and Congress would need to act to change this for future years.
Who Can Still Deduct Moving Expenses Federally?
Active-Duty Military (Unchanged)
Active-duty members of the U.S. Armed Forces — Army, Navy, Air Force, Marine Corps, Coast Guard, Space Force — who move pursuant to a military order and a permanent change of station (PCS) can still deduct moving expenses on Form 3903. This applies to both the service member and their family members who move with them.
Deductible military PCS moving expenses include:
- Cost of moving household goods and personal effects
- Transportation costs for the member and household (airfare, mileage at 17¢/mile for 2025)
- Lodging during the move (not meals)
- Storage of household goods during the move
Note: if your employer (the military) reimburses moving expenses, those reimbursements are excluded from income for PCS moves — you don’t pay tax on them, and you don’t deduct them (no double benefit).
State Moving Expense Deductions: The Hidden Opportunity
This is what most people miss entirely. While the federal deduction is suspended for non-military filers, many states continue to allow the moving expense deduction for all qualifying filers who moved for work. If you live in one of these states, you may be able to deduct moving expenses on your state return even though you can’t on your federal return.
States that have decoupled from the federal suspension and continue to allow moving expense deductions as of 2025 include:
- California — CA conforms to pre-TCJA rules and allows moving expense deductions for all qualifying filers
- New York — allows moving expense deductions consistent with pre-TCJA federal rules
- New Jersey — allows a deduction that tracks older federal rules
- Hawaii — conforms to pre-TCJA deduction availability
- Massachusetts — decoupled from TCJA on this provision
- Pennsylvania — limited moving expense deduction rules apply
State tax laws change; verify your state’s current conformity status with your state tax agency or a local tax professional.
The Pre-TCJA Rules: What Qualified (Still Applies for States and Military)
For states that allow the deduction, and for active military federally, the pre-TCJA rules apply. There were two tests:
The Distance Test
Your new workplace must be at least 50 miles farther from your former home than your old workplace was. If your old commute was 10 miles and your new job is 60 miles from your old home, you meet the test (60 − 10 = 50). If your old commute was 5 miles and your new job is 40 miles away, you fail the test (40 − 5 = 35, not 50).
The Time Test
You must work full-time in the new area for at least 39 weeks during the 12 months after you move (self-employed: 78 weeks during the 24 months after the move). This test can be waived if you’re laid off, disabled, or transferred again by your employer.
What Moving Expenses Qualify Under the Old Rules?
- Moving household goods and personal property — professional movers, truck rental, packing supplies, shipping
- Transportation for you and household members — airfare, train, or mileage to drive to the new home
- Lodging during the move — one night before leaving, nights during the move (not at the destination)
- Storage (up to 30 days) — storage facility costs while finding permanent housing
What Doesn’t Qualify (Even Under Old Rules)
- Meals during the move
- House-hunting trips before the move
- Temporary living expenses at the new location
- Real estate commissions or closing costs on old/new home
- Security deposits
- Loss on the sale of your old home
Employer Relocation Packages: Tax Treatment
If your employer paid or reimbursed your moving costs, the tax treatment depends on whether you’re military:
- Non-military employees: Since 2018, employer-paid moving expense reimbursements are treated as taxable income included in your W-2 Box 1. The “qualified moving expense reimbursement” exclusion that used to exist is suspended along with the deduction. You may owe significant income and payroll taxes on relocation payments — often a surprise to people accepting jobs with relocation packages.
- Military PCS reimbursements: Still excluded from income when received pursuant to military orders.
If you received a taxable relocation payment from your employer, you can ask your employer to “gross up” the payment — pay you additional money to cover the tax owed on the relocation benefit. Many large employers do this routinely; it’s worth negotiating.
Self-Employed Movers
Self-employed individuals who relocated for business purposes lost the federal moving deduction in 2018 along with employees. In states that still allow the deduction, self-employed movers can claim it on their state return. The time test for self-employed is stricter: 78 weeks of full-time work within 24 months of the move.
Frequently Asked Questions
I moved for a new job in 2025. Can I deduct it federally?
Only if you’re active-duty military with a PCS order. All other filers cannot deduct moving expenses on their federal return under current law (TCJA suspension through 2025). Check your state return — you may be able to deduct on the state level.
What if Congress restores the deduction after 2025?
The TCJA provisions are scheduled to sunset at the end of 2025, which would restore the pre-2018 moving expense deduction for all qualifying filers starting in 2026 — unless Congress acts to extend the TCJA provisions. Watch for legislative updates heading into the 2026 tax year.
Can I deduct moving expenses on my California return even though I can’t federally?
Yes. California did not adopt the TCJA suspension of moving expense deductions. If you moved for qualifying work reasons in California, you can deduct qualifying moving expenses on your CA state return using CA Schedule CA (540), even with no federal deduction.
Related guides: Self-Employed Tax Deductions Checklist | Home Office Deduction Guide | California Tax Deduction Guide