Can I deduct moving expenses in 2025?

by | May 9, 2025 | Deductions, Individual Taxes

Here’s what HIVE AI had to say about “Can I deduct moving expenses in 2025?”:

Moving Expense Deduction in 2025

For most taxpayers, moving expenses will not be deductible in 2025, but there is a significant exception for active-duty military members.

General Suspension of Moving Expense Deduction

The moving expense deduction is suspended for taxable years 2018 through 2025, except in the case of an individual to whom subsection (g) applies. IRC § 217(k) This suspension was enacted as part of the Tax Cuts and Jobs Act of 2017.

Specifically, for taxable years beginning after December 31, 2017, and before January 1, 2026, the deduction for moving expenses is suspended except for members of the Armed Forces of the United States on active duty who move pursuant to a military order and incident to a permanent change of station. IRC § 132(g)

Section 11049 of the TCJA suspends the deduction for moving expenses for taxable years beginning after December 31, 2017, and before January 1, 2026. However, the suspension does not apply to members of the Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station. Thus, except for taxpayers to whom § 217(g) applies, the standard mileage rate provided in this notice is not applicable for the use of an automobile as part of a move occurring during the suspension. Notice 2025-5

Military Exception

If you are an active-duty member of the U.S. Armed Forces, you can still deduct moving expenses in 2025 if:

Only taxpayers who are members of the military on active duty may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station. IRS Newsroom – IR-2024-312

The moving expense deduction remains temporarily suspended, unless you’re a member of the armed forces on active duty and, due to a [permanent] change of station. Limitations related to moving expenses under section 217(k) are set to expire after the 2025 tax year, unless amended, extended, or repealed. IRS – Publication 516: U.S. Government Civilian Employees Stationed Abroad

What Qualifies as Moving Expenses (for Military Members)

If you qualify for the military exception, the following expenses are deductible:

You can deduct expenses (if not reimbursed or furnished in kind) for: • Moving household goods and personal effects, and • Travel. IRS – Instruction 3903: Instructions for Form 3903, Moving Expenses

Moving household goods and personal effects includes expenses for hauling a trailer, packing, crating, in-transit storage, and insurance. You can’t deduct expenses for moving furniture or other goods you bought on the way from your old home to your new home. You can include only the cost of storing and insuring your household goods and personal effects within any period of 30 consecutive days after the day these goods and effects are moved from your former home and before they are delivered to your new home. IRS – Instruction 3903: Instructions for Form 3903, Moving Expenses

Moving expenses are defined as only the reasonable expenses (i) of moving household goods and personal effects from the taxpayer’s former residence to his new residence, and (ii) of traveling (including meals and lodging) from the taxpayer’s former residence to his new place of residence. The test of deductibility thus is whether the expenses are reasonable and are incurred for the items set forth in (i) and (ii) above. Tresuary Reg. 1.217-1

Standard Mileage Rate for Moving

For those who qualify (military members), there is a standard mileage rate that can be used:

The standard mileage rate for 2025 is unchanged from 2024 at 21 cents per mile for use of an automobile: (1) for medical care described in § 213; or (2) as part of a move for which the expenses are deductible under § 217(g). Notice 2025-5

Requirements for Deductibility (for Military Members)

In addition to being an active-duty military member moving under orders, there are distance requirements:

Section 217(c) provides conditions for the deductibility of moving expenses. Moving expenses shall be deductible only if the taxpayer’s new principal place of work is at least 50 miles farther from his residence than was his former principal place of work or, if he had no former place of work, is at least 50 miles from his former residence. Dawson U.S. Tax Court Opinions: Joseph J. Zajac, III

Documentation and Form Requirements

If you are eligible to claim moving expenses:

Complete Form 3903, Moving Expenses, and attach to the return. Rev. Proc. 2024-44

Employer Reimbursements for Moving Expenses

If your employer reimburses you for moving expenses:

Public Law 115-97 known as the “Tax Cuts and Jobs Act of 2017” was signed into law on December 22, 2017. The law suspended qualified moving expense deductions along with the exclusion for employer reimbursements and payments of moving expenses effective January 1, 2018, for tax years 2018 through 2025. Relocations that occurred prior to January 1, 2018, are still deductible. IRS IRM 1.32.12 IRS Relocation Travel Guide

This means that for non-military taxpayers, employer reimbursements for moving expenses are generally taxable income during the suspension period (2018-2025).

Special Cases for Overseas Moves

There are some special provisions for certain overseas moves:

The IRS has determined payment for extended storage of household goods for employees assigned to OCONUS locations will remain excluded from gross income and exempt from taxation. Additionally, transportation of an employee’s POV to, from and between the CONUS and a post of duty outside the continental United States, or between posts of duty OCONUS will remain excluded from gross income and exempt from taxation. IRS IRM 1.32.12 IRS Relocation Travel Guide

Conclusion

Unless you are an active-duty military member moving pursuant to military orders and a permanent change of station, you cannot deduct moving expenses on your 2025 tax return. The deduction for moving expenses for non-military taxpayers is suspended through December 31, 2025.

After 2025, barring any legislative changes, the moving expense deduction is scheduled to return for all taxpayers who meet the requirements. If you’re planning a move and want to maximize potential tax benefits, you might consider delaying your move until 2026 if that’s feasible for your situation.

For military members who qualify for the deduction, be sure to keep detailed records of all your moving expenses and use Form 3903 to claim the deduction on your tax return.

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