PCS and Taxes: Deducting Military Moving Expenses

When you move because of a permanent change of station, you may be able to deduct some of your unreimbursed moving expenses on your federal tax return. Many PCS costs are paid by military allowances, but not all of them. Keeping receipts and tracking your expenses will help you know what you can deduct at tax time.

Check out IRS Tax Topic 455, Moving Expenses for examples and more details.

Who is eligible?

Only active-duty military members who relocate due to PCS orders can reduce moving expenses. This includes:

• Moving from your home to your first duty station
• Moving from one permanent duty station to another
• Moving from your last duty station to your home or another location in the United States. This must happen within one year after you leave active duty unless the Joint Travel Regulations allow more time.

In certain situations, an unaccompanied spouse or dependent may also qualify. This includes cases where the service member deserts, is imprisoned or dies. The spouse or dependent’s move to a home of record or another approved location may be treated as a PCS.

Because of the Tax Cuts and Jobs Act, civilians cannot deduct moving expenses for tax years after 2017.

What expenses can be deducted?

You may deduct reasonable unreimbursed expenses directly related to your PCS move. These expenses must be for you and members of your household.

Household goods and personal items

You may deduct costs for:

• Packing and crating
• Moving a trailer
• Shipping household goods
• In-transit storage (up to 30 consecutive days) unless you are moving overseas
• Insurance on your shipment
• Shipping vehicles
• Transporting pets
• Moving household goods by car, container or a moving company
• Stopping and starting utilities because of the move

Travel to your new home

You may deduct:

• Transportation for you and your household members (airfare, or mileage if you drive)
• Actual car expenses (gas and oil) or the standard military move mileage rate
• Parking fees and tolls
• Lodging while traveling
• One night’s lodging at your old location if your furniture has already been shipped
• Your first night’s lodging at your new location

Your travel must follow the shortest, most direct route from your old home to your new one.

Foreign moves

If you move to or between foreign countries, you may deduct reasonable costs to move and store household goods for part or all of the time you are stationed overseas.

What expenses cannot be deducted?

You may not deduct:

• Meals during travel
• Temporary lodging beyond the first night at your new location
• Home purchase or home sale costs (closing costs, mortgage fees, taxes, repairs)
• Vehicle registration or driver’s license fees
• Vehicle repairs, insurance or depreciation
• Lease break fees
• Home improvements to make a sale
• Expenses for side trips, sightseeing or house-hunting trips
• Furniture or goods bought during the move
• Storage beyond 30 days (unless part of an overseas move)
• Any costs already paid for or reimbursed by the military

Reimbursements and income rules

• Do not include the value of government-provided moving services or certain PCS allowances in your income.
• If your reimbursements are higher than your actual costs and the extra amount is not listed on your W-2, you must include the excess in your income.
• If your reimbursements are lower than your actual costs, you may deduct the difference.

You cannot deduct expenses that the military has already reimbursed, including allowances such as:

• Monetary Allowance in Lieu of Transportation (mileage)
• PCS per diem
• Dislocation allowances
• Temporary lodging allowances

How to claim deductible moving expenses

• Calculate your total qualified unreimbursed PCS-related moving expenses.
• Use IRS Form 3903, Moving Expenses, to compute your deduction. The form requires certification that you are an active-duty member of the Armed Forces and that the move is required by a PCS order.
• Transfer the deduction amount from Form 3903 to your Schedule 1 (Form 1040). Attach a separate Form 3903 for each qualifying move.
• Keep all receipts, orders and records in case you need to adjust your deduction later.

The IRS website offers instructions and publications to help you through the process, including IRS Publication 3, the Armed Forces’ Tax Guide.

Planning tips for military families

• Review your PCS orders to be sure the move qualifies.
• Track travel, storage and household goods costs separately.
• If you and your family move to different locations, you may treat all moves as a single PCS move for deduction purposes.
• For overseas PCS moves, keep records of storage time and costs.
• Use MilTax and IRS resources for help each step of the way.

Need help?

Military OneSource offers free support through the MilTax suite of services:

• Free tax preparation and e-filing software
• Free phone consultations with MilTax tax professionals
• Live chat scheduling and support

Schedule an appointment to speak with a MilTax consultant by calling 800-342-9647. OCONUS/international? View calling options. Or log in to start a secure live chat to schedule a free consultation with a MilTax consultant or a financial counselor.