If you have to move because you are starting a new job, or if you are moving to a new location for your current employer, you may be entitled to a tax deduction for your moving expenses. You must meet certain qualifications to claim a moving expenses tax deduction, which are explained in Federal Tax Form 3903. To summarize, there are three requirements you must meet:

  1. Your move is closely related to the start of work
    Moving expenses that are incurred within one year from the first day you report to work at your new workplace are considered closely related to the start of work.

  2. You meet the distance test
    The location of your new workplace must be at least 50 miles farther from your old home than your previous workplace was.

  3. You meet the time test
    Employees: you are required to work full-time for a minimum of 39 weeks at your new work location within the first 12 months immediately after you move.

    Self-employed Persons: you are required to work full-time for a minimum of 39 weeks at your new work location within the first 12 months and a minimum of 78 weeks total within the first 24 months immediately after you move.

    There are exceptions to the time test including death, disability, involuntary separation, etc.

If you expect to meet the time test after your tax return is due, you still may be able to receive the moving expenses tax deduction in the year you move. However, if you claim the moving expenses tax deduction and later do not meet the time test, you must either amend your tax return or report the amount as income in the next year.

If you did not take the moving expenses tax deduction in the year you moved and you later meet the time test requirements, you may file an amended return for the year you moved to take the deduction.

There are exceptions that may affect you if you are relocating internationally or if you are a member of the Armed Forces and you should consult with a professional tax advisor.

For more information and for a list of deductible moving expenses, see the following resources:

IRS Moving Expenses Topic 455: http://www.irs.gov/taxtopics/tc455.html

IRS Moving Expenses Publication 521: http://www.irs.gov/publications/p521/ar02.html

IRS Tax Help Line for Individuals: (800) 829-1040

Disclaimer: The information on this page is not intended as tax advice or to include all aspects of Federal Tax Law as it relates to moving expenses and their deductibility. We are not tax experts and encourage you to seek independent advice.
02/24/2015 Posted in