If you’ve ever relocated to a new home for a job, you may have been able to deduct your qualified moving expenses. But the passage of the Tax Cuts and Jobs Act (TCJA) in 2017 removed the deductions from the tax code for nearly every taxpayer. Here’s what you need to know about relocation reimbursement, exclusions and deductions according to the current IRS code.
Are Moving Expenses Tax Deductible?
As of the 2018 tax year, no. Most taxpayers can no longer deduct moving expenses due to the TCJA, passed in 2017. That means that movers who rely on a lower tax bill should reconsider their budget well before Tax Day. In 2025, Congress passed legislation that extends the suspension of the moving expense deduction permanently for most taxpayers.
Why are moving expenses no longer tax-deductible?
It all stems from the 2017 Tax Cuts and Jobs Act. One of the act’s many provisions was to remove moving tax benefits for most taxpayers, whether it’s a personal move or an employer-sponsored relocation. An exception applies to active-duty military personnel who are relocating due to military orders or a permanent change of station.
Employer Relocation Benefits Are Taxable
In the former tax code, you could exclude employer relocation assistance from your income. Whether your boss paid in advance for your move to a new location or your employer reimbursed you for moving expenses, you didn’t have to count those qualifying funds as income.
Now, your employer must report the financial assistance you receive for a relocation. Any move you make with corporate or employer assistance will essentially raise your gross income. If your employer covers the costs of any of the following services related to a new job relocation, you and your employer must report the cost of the service as pay:
- Hotel rooms and lodging
- Airfare to your new destination
- Mileage reimbursement
- Shipment of vehicles
- Storage of household furnishings
These benefits must be reported by your employer and included in your gross income on your W-2. As a result, you should ask your boss about raising your pay to help cover the cost of the extra move-related taxes. Some employers may end up curtailing their relocation programs due to the tax changes. Companies that rely on a flexible, mobile workforce will be willing to help their employees relocate without imposing additional financial penalties.
Active Duty Military Exemptions
Certain active-duty members of the armed forces are the only taxpayers allowed to exempt their qualified relocation expenses from their income. The move must be related to a new active duty post, and other move-related restrictions still apply. The good news for military members who qualify for exclusions is that the federal mileage reimbursement rate has increased over time to $0.21 per mile.
Deductions for Moving Expenses Are Permanently Suspended
Like the income-exemption rules, former rules for deducting out-of-pocket moving expenses have been permanently suspended. You may no longer deduct job-related moving expenses from your gross income, even when you paid for the move yourself.
This means you can’t deduct the following expenses:
- Packing of furnishings and personal effects
- Shipping of household goods
- Gas and oil for vehicle relocation
- Lodging in old location
- Lodging during move
- Connection and disconnection of utilities
Because of the tax changes, you should rethink some of your moving strategies to save money to pay your higher taxes. Do you plan to ship your vehicle to your new location? Do you also plan to have a professional pet relocation service deliver your pets to your new home? Consider the total fees for both services, especially since the costs don’t qualify as tax deductions. Ask a family member or friend to drive your car and your pets to the new location instead.
Check Your State Government Tax Code
It’s important to become familiar with your state’s tax code, as some states still allow deductions or have different rules. You’ll still be taxed according to the federal tax code post-TCJA, but state taxes vary depending on their individual laws and codes. Additionally, we recommend consulting a tax professional, especially if your move involves special status or is near the reinstatement window, because tax law is constantly changing.
Make Moving Easy With Wheaton World Wide Moving
The relocation professionals at Wheaton World Wide Moving help families across the U.S. manage their moves and their moving expenses. Contact us today or request an estimate to learn more about our relocation services for households, seniors, government staff, corporate employees and military members.
