Deduct military-related moving expenses with Form 3903

What is Form 3903?

Some active-duty military taxpayers can use Form 3903 to claim the deduction for job-related moving expenses. They can take this deduction as an adjustment to income on Schedule 1. This means eligible taxpayers can claim it without needing to itemize deductions on Schedule A.

Tax reforms in 2018 suspended this deduction for most taxpayers until 2025. Now, only active-duty members of the armed forces, who are ordered to relocate due to permanent changes in station, can claim this deduction through 2025.

Since active-duty military members often experience frequent post changes, they may need separate Forms 3903.

Who is eligible for the moving expense deduction?

Active-duty military taxpayers, such as members of the Army, Navy, and National Guard, and, in certain cases, their spouses and dependents, are the only taxpayers who are eligible for the moving expense deduction.

To be eligible for the deduction, service members must also have a permanent change of station. This includes armed forces members who are moving from their home to their first active-duty post, or from one permanent post to another. The service member is entitled to one final move within a year of retiring. The move must be to their home of record or near their home.

Spouses or dependents of active-duty military members may be able to claim the moving expense deduction in certain circumstances. If the service member dies, is imprisoned, or deserts the armed forces, a move by the spouse may be treated as a permanent change in station if it is to any of the following locations:

• Where the serviceman was enlisted or inducted
• The servicemember's or spouse's home of record
• A location closer to either home within the United States

If the military has relocated a service member's spouse and/or dependents from separate locations, the moves are combined and treated as one relocation to the new home.

Qualified moving expenses

The IRS allows taxpayers to deduct a "reasonable" amount of unreimbursed moving expenses to move themselves and members of their households. Taxpayers can deduct any reasonable costs incurred to travel and move household goods and personal effects that the military has not, or will not, reimburse. Reasonable expenses would include:

• Trailer and truck rental
• Packing, crating, and white-glove moving services
• Airfare
• Actual car expenses, or $0.22/mile for the 2023 tax year (plus parking and tolls regardless of method)
• Pet relocation services
• Postage and freight
• Connecting and disconnecting utilities
• Insurance
• Storage of up to 30 consecutive days after goods have been removed from the taxpayer’s home, unless it is for a foreign move

Some expenses are not qualified moving expenses, and, therefore, are not deductible:

• Expenses in buying a new home or entering a new lease
• Car tags and driver's licenses
• Meals while in transit
• Travel and lodging that are considered lavish
• Additional side trips
• Furnishings and other goods purchased in transit to the new home

Taxpayers claiming this credit should report transportation and the bulk of moving costs on Line 1, and travel and lodging expenses on Line 2.

Any reimbursement you received from the military is reported in Box 12 of Form W-2, with the code P. You must enter this amount on Line 4 of Form 3903. The amount of moving expenses that exceeds any reimbursement you received is the deductible portion that you should report on Line 5 and carry to Schedule 1.

Confused? We can help. A Jackson Hewitt Tax Pro can explain this form and help you fill it out, with any supporting documentation or calculations you may need. Taxes can be complicated, but you are not on your own. Contact us today.

About the Author

Mark Steber is Senior Vice President and Chief Tax Information Officer for Jackson Hewitt. With over 30 years of experience, he oversees tax service delivery, quality assurance and tax law adherence. Mark is Jackson Hewitt’s national spokesperson and liaison to the Internal Revenue Service and other government authorities. He is a Certified Public Accountant (CPA), holds registrations in Alabama and Georgia, and is an expert on consumer income taxes including electronic tax and tax data protection.

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