Moving Expenses Tax Deduction 2026: Who Qualifies & How to Claim

Federal Moving Expense Deduction Status in 2026

Before 2018, any taxpayer who moved for work could deduct qualified moving expenses if they met two tests: the distance test (new job at least 50 miles farther from your old home than your old job was) and the time test (working full-time for at least 39 weeks in the 12 months following the move).

The Tax Cuts and Jobs Act (TCJA) of 2017 suspended this deduction for tax years 2018 through 2025 for everyone except active-duty military members. As of early 2026, Congress is debating whether to extend, modify, or let the TCJA provisions expire.

What Happens If TCJA Expires?

If the TCJA moving expense provisions expire without reauthorization, the pre-2018 rules would return. That means civilians who move for work and meet the distance and time tests could once again deduct moving expenses on their federal tax returns using IRS Form 3903.

However, if Congress extends TCJA (which many analysts expect for at least some provisions), the civilian deduction will remain suspended. Check IRS updates at irs.gov for the latest status as tax season progresses.

States That Still Allow Moving Expense Deductions

Several states did not conform to the TCJA suspension and continue to allow moving expense deductions on their state income tax returns. If you're moving to or within one of these states, you may be able to deduct qualified moving costs even though you can't at the federal level.

If you're leaving California or leaving New York, you may be able to deduct your moving costs on your final partial-year state return. This can reduce your state tax bill in the year of your move — a valuable benefit on top of the ongoing savings from relocating to a lower-tax state.

Military Moving Expense Deduction

Active-duty members of the U.S. Armed Forces are the one group that can still deduct moving expenses on their federal tax returns in 2026, regardless of TCJA status. To qualify, you must be on active duty and moving because of a Permanent Change of Station (PCS) order.

What Qualifies as a PCS Move?

• A move from your home to your first post of active duty
• A move from one permanent post of duty to another
• A move from your last post of duty to your home or a nearer point in the U.S. (within 1 year of ending active duty)

What Expenses Are Deductible?

• Transportation of household goods — packing, crating, shipping, storage (up to 30 days), and insurance for your belongings
• Travel costs — gas, tolls, parking, and standard mileage rate (22 cents/mile in 2026) for driving to your new home
• Lodging expenses — hotel costs during the trip (but not meals)
• Vehicle shipping — costs to ship your car or other vehicles to your new duty station

How to Claim: IRS Form 3903

Military members use IRS Form 3903 to calculate and report deductible moving expenses. The form is straightforward:

1. Line 1: Enter transportation and storage costs for household goods
2. Line 2: Enter travel and lodging expenses
3. Line 3: Add lines 1 and 2 for total expenses
4. Line 4: Enter reimbursements received from the military (DITY/PPM payments, etc.)
5. Line 5: Subtract line 4 from line 3. This is your deductible amount, reported on Schedule 1 of Form 1040.

Other Ways to Save on Moving Costs

Even without a federal deduction, there are several strategies to reduce your out-of-pocket moving expenses and optimize your tax situation.

1. Negotiate Employer Relocation Packages

Many employers offer relocation assistance for new hires or transfers. While employer-paid moving costs are now treated as taxable income under TCJA, some companies offer tax gross-ups that cover the additional tax burden. When negotiating a job offer, ask specifically about:

• Moving cost reimbursement amounts
• Whether the company provides tax gross-up on reimbursements
• Temporary housing allowances
• House-hunting trip coverage
• Home sale assistance or buyout programs

2. Time Your Move for Tax Year Optimization

The timing of your move can significantly impact your tax bill. Consider these strategies:

• Move early in the year to minimize the number of months you're a resident in a high-tax state
• Defer bonuses or income until after you establish residency in the new (lower-tax) state
• Accelerate deductions in your high-tax state before moving (charitable donations, property tax prepayments)
• Coordinate with your employer on the effective date of your relocation for payroll tax purposes

3. Keep Detailed Receipts

Even if you can't deduct moving expenses federally, keep every receipt. You may need them for state deductions (if your state allows them), employer reimbursement claims, or if the federal deduction is restored retroactively. Important receipts to save:

• Moving company quotes and invoices
• Truck rental agreements
• Gas receipts and mileage logs
• Hotel receipts during travel
• Storage unit costs
• Packing supplies

Use our Moving Cost Estimator to plan your budget before you move and track what you should expect to spend.

How Moving States Affects Your Taxes

Beyond the moving expense deduction, changing your state of residence has significant ongoing tax implications. Here's what you need to know about the tax side of an interstate move.

Partial-Year Residency

When you move between states mid-year, you'll typically need to file two state tax returns: a partial-year return in your old state (for income earned before the move) and a partial-year return in your new state (for income earned after). Some key considerations:

• Each state taxes only the income you earned while a resident (with some exceptions for investment income)
• Your domicile date — the date you establish your new permanent home — determines the split
• Some states (like California and New York) are aggressive about claiming you as a resident and may audit your move
• Keep documentation of your move date: lease agreements, utility start dates, driver's license change, and voter registration

Tax Savings From Moving to a No-Income-Tax State

The biggest tax benefit of relocating often isn't the moving deduction — it's the ongoing savings from living in a state with lower (or no) income tax. Nine states currently have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Learn more in our guide to states with no income tax.

As the table shows, someone earning $150,000 could save over $10,000 per year just in state income taxes by moving from California to Texas. Over a decade, that's more than $100,000 in savings. Explore the detailed comparison in our California vs. Texas guide, or calculate your personal numbers with our Paycheck Calculator.

Of course, income tax isn't everything. States without income tax often compensate with higher property or sales taxes. Use our Cost of Living Calculator to compare the full financial picture. For a deeper dive into tax-friendly states, see our states with the lowest taxes in 2026 guide.

Frequently Asked Questions