Moving expenses and taxes: What you need to know

For years, American taxpayers could write off moving expenses if they relocated for work. However, that tax break went away in late 2017, when then-President Donald Trump signed the Tax Cuts and Jobs Act (TCJA). As of the 2018 tax year, moving expenses for relocating employees are no longer a deductible expense.

Are moving expenses tax deductible?

No, not any longer. Prior to TCJA, the IRS had allowed taxpayers to deduct expenses associated with a move, so long as the relocation was work-related and involved a move of at least 50 miles. Now, moving expenses are taxable. If your employer reimburses you for moving expenses, it must be included as part of your wages, and as such it is subject to income taxes.

There is an exception, however: Members of the U.S. Armed Forces on active duty who are ordered to move as part of a permanent change of station may be able to deduct moving expenses that aren’t covered by the government.

Examples of moving expenses

Common moving expenses:

• A moving van or truck
• Movers/labor
• Airfare or travel to your new city
• Boxes and packing supplies

Expenses that are not deductible:

• Penalties for breaking a lease
• Mortgage penalties
• House hunting expenses
• Real estate broker’s fees
• Rent for temporary housing

A more comprehensive explanation of TCJA can be found in IRS Publication 5307, “Tax Reform Basics for Individuals and Families.”

Bottom line

Work-related moving expenses for relocating employees used to be tax-deductible, but after the Tax Cuts and Jobs Act of 2017, they are not any longer. At least, not for civilians: Active military service members still can write off moving expenses if they’re ordered to move to a different location.