The 2017 Tax Cuts and Jobs Act (TCJA) suspended the moving expense deduction for most Americans through 2025. Active duty members of the U.S. Armed Forces are a specific exception — they retain the ability to deduct unreimbursed qualified moving expenses incurred as a result of a Permanent Change of Station (PCS) order.
Who Qualifies
Per IRS Publication 521, active duty servicemembers who move due to a military order and a permanent change of station can deduct qualified moving expenses not reimbursed by the government. The key elements are:
- Active duty status at the time of the move
- A military order requiring the move (PCS orders)
- The move is to a new permanent duty station
Dependents of servicemembers who move because the servicemember was transferred, died, or became missing or a prisoner of war may also be eligible.
What Expenses Are Deductible
Deductible moving expenses include:
- Cost of transporting household goods and personal effects from the old home to the new duty station
- Cost of transporting yourself and your family members
- Storage costs for up to 30 days (in certain circumstances)
Non-deductible expenses include meals during the move, house-hunting trips, temporary living expenses at the new duty station, and any moving expense reimbursed by the government.
Government Reimbursements Are Not Taxable
Any PCS reimbursements, allowances, or payments made by the government directly for qualified moving expenses are excluded from your gross income under current law. Dislocation Allowance (DLA), Temporary Lodging Expense (TLE), and transportation and storage payments made by the government to move your household goods are not taxable income.
However, certain payments — such as miscellaneous moving expense payments that are not tied to specific actual expenses — may be taxable. Review your W-2 carefully to see which PCS-related payments DFAS included in Box 1 (taxable wages) versus which were excluded.
How to Claim the Deduction
Deductible unreimbursed moving expenses are claimed on IRS Form 3903 (Moving Expenses), which you attach to your federal Form 1040. The deductible amount flows to Schedule 1 as an adjustment to income, reducing your AGI.
Maintain receipts and records for all moving expenses. If the government reimburses you for an expense, you cannot also deduct it — only unreimbursed costs are deductible.
KEY TAKEAWAYS:
- Active duty servicemembers retain the moving expense deduction even though it was suspended for civilians through 2025
- Deductible expenses include transportation of household goods and family; not meals, house-hunting trips, or reimbursed costs
- Government reimbursements for qualified moving expenses (DLA, TLE, household goods transport) are not taxable income
- Claim unreimbursed deductible moving expenses on IRS Form 3903, attached to Form 1040
- Review your W-2 each PCS year — some government payments appear in taxable wages and some do not