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Moving Expense Guidelines

The current tax regulations regarding moving expenses are as follows (refer to IRS Publication 521 for specific details on taxable and non-taxable moving expense):

Tests for Tax Deductibility: Two conditions must be met before job related moving expenses could be considered non-taxable.

1.   Distance Test - The new workplace must be at least 50 miles farther from the employee’s old residence that the previous workplace was (e.g., if the employee’s old job was 10 miles from his old residence, the new job must be at least 60 miles from the old residence).  If there was no previous workplace, the new workplace must be at least 50 miles from the employee’s old residence.  The shortest driving distance between the two points is the rule of measurement.

2.   Time Test - During the 12-month period immediately following the move, the employee must work full time for at least 39 weeks in the general location of the new workplace. This requirement does not apply if the employee cannot meet it because of death, disability, involuntary termination of employment (except for willful misconduct), or transfer for the employer’s benefit. The move must also be closely related in time to the start of your new job, usually within one year.

Deductible Moving Expenses:

There are only two types of deductible moving expenses:

1. Transportation and in-transit storage of household goods and personal effects.

   Transportation of household goods. All reasonable expenses incurred in the packing and moving household goods and personal effects to the new residence and storing and insuring them while in transit are deductible.

   Storage costs constitute “in-transit” expenses if they are incurred within 30 days after the goods and effects are moved from the old residence and before delivery to the new residence. The employer can reimburse the employee for the expenses or pay the moving company directly.
    

2. Expenses of traveling from the old residence to the new residence, with the exception of  meals, which are not deductible.  All reasonable expenses incurred while traveling from the employee’s old home to the new home, such as transportation and lodging during the trip, are deductible.

NOTE: REASONABLE EXPENSES ONLY! The most direct route and lodging must not be “lavish or extravagant”.

Non-deductible Moving Expenses (Previously were deductible):

• Pre-move house hunting expenses.

• Temporary living expenses after starting in the new location.

• Real estate expenses.

• Cost of meals while traveling from the old home to the new home.