What Moving Expenses Are Deductible?

If you incur moving expenses in connection with a change in work location, some of your expenses may be deductible, whether or not you can itemize deductions.

In order to qualify for any deduction, your new principal work place must have increased your potential commute by 50 or more miles. That is, the distance from your new work place to your old home is at least 50 miles more than the distance from your old workplace to your old home.

Also, you must be employed at your new location for at least 39 weeks during the 12 months following your move. If you are self- employed, you must work full time in that general area for at least 39 of the 12 months following the move, and 78 weeks during the first two years. (These rules do not apply if you retire due to disability, or you are laid off or terminated for a reason other than misconduct.)

Form 3903 lists the deductible expenses, which are:

  • Transportation and storage of household goods and personal effects during the move, and
  • Travel and lodging (but not meals) of moving you, your spouse and dependents, from your old to your new residence. If you use your personal vehicle, you can deduct either the actual expenses involved for gas and oil (but not maintenance, insurance or depreciation), or a flat 17 cents per mile.

You may NOT deduct: pre-move house-hunting trips, temporary living expenses, costs of selling/renting/buying your old or new home.

If you are reimbursed by your employer for deductible moving expenses, the total of those reimbursements will be listed as a "memo entry" on Form W-2, but will NOT be included in your taxable wages. No deduction is allowed or necessary.

However, if your employer paid other expenses for your relocation that are not allowed as deductible moving expenses, these are taxed to you as additional wages.