Get 1998 Publication 521. Moving Expenses

Employers may pay all or some of the employee's moving expenses directly, such as paying a moving company to move the employee's household goods and personal effects. Or the employer may choose to reimburse the employee for all or some of his moving expenses.

A moving expense is the cost of packing, shipping, and storage of household goods or a mobile home, and reasonable expenses incurred for moving an automobile. It is also critical to keep in mind that certain items are taxable moving expenses.

For most taxpayers, moving expenses are no longer deductible, meaning you can no longer claim this deduction on your federal return.

Qualified education expenses Tuition and fees. Room and board. Books, supplies and equipment. Other necessary expenses (such as transportation).

Once this bill became law, taxpayers were no longer allowed to deduct any moving expenses unless they're active-duty members of the U.S. military (Army, Marine Corps, Navy, Air Force, Space Force or Coast Guard). This policy will remain in effect until January 1, 2026.

Nonqualified expenses are expenses related to moving that the IRS deems to be subject to tax withholding and reporting. Therefore, the reimbursement of such expenses is deemed to be treated as taxable wages.

With the change to the moving expenses tax deduction, only seven states allow moving deductions or exclude moving expenses from taxable income: Pennsylvania. New York. Massachusetts. New Jersey. Arkansas. California. Hawaii.

Yes. The total amount of expenses that can be claimed is limited to the employment/self-employment income earned at the new work location. For full-time students, the eligible expenses are limited to the taxable income received from scholarships, fellowships, bursaries, certain prizes, and research grants.