Can I claim moving expenses if I relocated for a new job in 2025?

by | May 22, 2025 | Individual Taxes, Life Events

Here’s what HIVE AI had to say about “Can I claim moving expenses if I relocated for a new job in 2025?”:

Moving Expenses Deduction for a New Job in 2025

Unfortunately, you cannot claim moving expenses as a deduction if you relocated for a new job in 2025, unless you are a member of the Armed Forces on active duty. The Tax Cuts and Jobs Act suspended the deduction for moving expenses for taxable years beginning after December 31, 2017, and before January 1, 2026. IRC § 132(g)

Current Status of Moving Expense Deductions

The Tax Cuts and Jobs Act (TCJA) section 11048 repealed the exclusion from gross income and wages for qualified moving expense reimbursements, except in the case of a member of the Armed Forces of the United States on active duty who moves pursuant to a military order. This suspension applies to taxable years beginning after December 31, 2017, and before January 1, 2026. IRS IRM 4.23.5 Technical Guidelines for Employment Tax Issues

Section 11049 of the TCJA specifically 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 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 a member of the Armed Forces on active duty and your move is pursuant to a military order and incident to a permanent change of station, you are still eligible to deduct moving expenses. In this case:

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 exclusion applies only to reimbursement of moving expenses that the member could deduct if they had paid or incurred them without reimbursement. See Moving Expenses in Publication 3, Armed Forces’ Tax Guide, for the definition of what constitutes a permanent change of station and to learn which moving expenses are deductible. IRS – Publication 15: Circular E, Employer’s Tax Guide

What Would Be Deductible (After 2025 or for Military Personnel)

If you were eligible to claim moving expenses (either after the suspension ends in 2026 or as a qualifying military member), the following would be deductible:

Moving expenses paid or incurred during the taxable year in connection with the commencement of work by the taxpayer as an employee or as a self-employed individual at a new principal place of work would be allowed as a deduction. IRC § 217(a)

Moving expenses are defined as “reasonable expenses (A) of moving household goods and personal effects from the former residence to the new residence, and (B) of traveling (including lodging) from the former residence to the new place of residence.” Dawson U.S. Tax Court Opinions: Noah Charles Boss

These expenses specifically include:

Requirements for Deductibility (When Available)

When the deduction becomes available again (after 2025), you would need to meet these requirements:

Distance Test

Under section 217(c), a taxpayer’s new place of work must be fifty miles further from his residence than his previous place of employment in order to be eligible to deduct applicable moving expenses. Dawson U.S. Tax Court Opinions: Noah Charles Boss

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

The distance test requires that the new job is at least 50 miles farther from the former home than the old job location was from the former home. IRS – Publication 5137: Fringe Benefit Guide

Time Test

The taxpayer must also meet the so-called “39-week test”: he must be a full-time employee in that location for at least thirty-nine weeks during the following twelve-month period following the move. Dawson U.S. Tax Court Opinions: Noah Charles Boss

The time test requires that the employee must work at least 39 weeks full-time in the first year after arriving in the new location. IRS – Publication 5137: Fringe Benefit Guide

Section 217(c)(2) provides that no deduction shall be allowed unless (A) the taxpayer is a full-time employee at the new principal place of work during the 12-month period following his arrival in the general location of his new principal place of work for at least 39 weeks or (B) during the 24-month period following the taxpayer’s arrival in the general location of his new principal place of work, the taxpayer is a fulltime employee or performs services as a self-employed individual on a full-time basis for at least 78 weeks and at least 39 weeks are in the first 12-month period. Dawson U.S. Tax Court Opinions: Joseph J. Zajac, III

Timing of the Move

To qualify as being in connection with the commencement of work, the move for which moving expenses are incurred must bear a reasonable proximity both in time and place to such commencement. In general, moving expenses incurred within one year of the date of the commencement of work are considered to be reasonably proximate to such commencement. Tresuary Reg. 1.217-1

Move must bear a reasonable proximity both in time and location to starting work at the new job location (generally moving expenses incurred within one year of the date the employee first reports to work at the new location qualify; moving expenses incurred after this one-year period may be considered reasonably proximate if it can be shown circumstances prevented these costs from being incurred within the one-year period). IRS – Publication 5137: Fringe Benefit Guide

Employer Reimbursements

When the suspension ends, if your employer reimburses you for moving expenses, these would be considered “qualified moving expense reimbursements” which means any amount received (directly or indirectly) by an individual from an employer as a payment for (or a reimbursement of) expenses which would be deductible as moving expenses under section 217 if directly paid or incurred by the individual. Such term shall not include any payment for (or reimbursement of) an expense actually deducted by the individual in a prior taxable year. IRC § 132(g)

Standard Mileage Rate for Moving (When Applicable)

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

What You Can Do Now

Since the moving expense deduction is currently suspended for non-military taxpayers, here are some alternatives to consider:

  • Check with your employer: Some employers offer relocation packages or reimbursements. While these would be taxable income to you during the suspension period, they can help offset your costs.
  • Keep records: If your move occurs in 2025, maintain detailed records of all your moving expenses. If the law changes or if retroactive provisions are enacted, you’ll have documentation ready.
  • Plan for 2026: If possible and if your situation allows, consider delaying your move until after January 1, 2026, when the suspension is scheduled to end (unless extended by new legislation).
  • Consult a tax professional: A tax professional can help you identify other tax benefits that might be available to you based on your specific situation.

Conclusion

Unless you are an active duty military member moving under orders, moving expenses for a new job are not deductible in 2025. The deduction is scheduled to return in 2026 unless Congress extends the suspension. When the deduction becomes available again, you’ll need to meet both the distance test (new workplace at least 50 miles farther) and the time test (work at least 39 weeks in the first year) to qualify.

Sources:

  • IRC § 132(g)
  • IRC § 217(a)
  • IRS Newsroom – IR-2024-312
  • IRS Publication 463: Travel, Gift, and Car Expenses
  • IRS IRM 4.23.5 Technical Guidelines for Employment Tax Issues
  • Notice 2025-5

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