If you’re active-duty military personnel or live in one of the seven states listed above, the following relocation expenses are potentially deductible from your state income: Cost of transporting household goods and personal effects, including: What relocation expenses are deductible from state income? However, as of February 2022, seven states still allow a moving tax deduction from state income. Most states updated their tax legislation to match the TCJA amendments, meaning moving expenses are no longer considered as write-offs. The TCJA also affected the eligibility of moving expense deduction at the state income level. As of 2022, only active military personnel can claim moving expense deductions on their federal return. The Tax Cuts and Jobs Act of 2017 (TCJA) made a legislative overhaul that affected taxpayers’ ability to deduct moving expenses on their federal income tax. You must work full-time for 39 weeks in the 12 months following the move.Your new workplace must pass the “distance test” the distance from your old home to your new place of business must be, at minimum, 50 miles farther than the distance from your old home to your old place of business.Your move must be directly associated with relocating for work or a new job.These expenses must be considered as necessary to your move.įor the IRS to consider your moving expenses deductible, your move must check these three items: Relocation moving expenses refer to costs incurred when you move to a new home because of your job. What counts as a relocation moving expense?
Whether you’re planning to move or recently relocated, figuring out the deductibility status of all the expenses you picked up along the way can be complicated. Unfortunately, even the best opportunities sometimes come at a cost, and accepting an assignment that requires relocation can be expensive. Relocating can be an exciting, fresh start – new sights, new people, new digs, a new you. Whether you’re considering or have already accepted a relocation assignment, you’ve certainly wondered what costs you’d accrue during your move – and which of those qualify as tax write-offs.
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