Are Moving Expenses Tax Deductible? What You Need to Know in 2025

The Tax Cuts and Jobs Act of 2017 significantly changed the rules around moving expense deductions, and many people are still operating on outdated assumptions. Prior to 2018, most employees who moved for work could deduct qualifying moving expenses — movers, truck rental, travel, lodging — directly on their federal tax return. Beginning with the 2018 tax year and continuing through at least 2025, the moving expense deduction has been suspended for most civilians. This means that the average person relocating for a job in Boston cannot deduct their moving costs on their federal return, regardless of whether the move was work-required. The exceptions, as with many tax provisions, are in the details.

The one major exception that remains in effect through 2025: active-duty members of the U.S. Armed Forces can still deduct moving expenses when they move pursuant to a military order. This includes moves to a new permanent duty station, moves upon separation or retirement if moving to the member's home of record, and moves to or from an overseas duty station. Eligible military personnel can deduct the reasonable cost of moving household goods and personal effects, along with travel expenses for themselves and their families. IRS Form 3903 is used to calculate the deductible amount, and the deduction is taken as an adjustment to income, meaning it applies even if you do not itemize deductions.

For civilians, the situation is different but not hopeless. While the federal deduction is suspended, some states have their own moving expense deduction rules that predate and survive the federal change. Massachusetts, for example, conforms to the federal treatment, meaning Bay Staters do not get a state deduction either. However, if your employer reimburses your moving expenses, the rules are worth understanding: employer reimbursements for qualified moving expenses are currently taxable to the employee as ordinary income (unlike pre-2018 when they could be excluded). This means that if your new employer offers a $5,000 relocation package, that money will appear on your W-2 as income and be taxed accordingly — something many new employees do not realize until tax season.

Looking ahead, the TCJA provisions affecting moving expense deductions are set to expire after December 31, 2025, absent Congressional action. If the law sunsets as written, the pre-2018 rules — including the deduction for qualified moving expenses related to work — could return for the 2026 tax year. This is not guaranteed, as Congress may extend or modify the provisions, and tax law can change. The best advice: keep all receipts and documentation for your moving expenses regardless, consult a qualified CPA or tax professional about your specific situation, and do not make financial decisions about your move based on a deduction that may or may not be available. Boston Best Rate Movers can provide a detailed itemized invoice for your move, which is the documentation you will need if a deduction or reimbursement claim applies to your situation.