Yes, for some filers. New York State kept its own moving expense subtraction (code S-135 on Form IT-225) for filers whose new workplace is at least 50 miles farther from their old home and who work full time there for 39 weeks. Check the current instructions for your tax year. Federally, only active-duty military moving under orders can deduct.
Moving to or within NYC is expensive: professional movers, packing supplies, transportation costs, and temporary housing can easily add up to thousands of dollars. If you're relocating for work, you might hope to recover some costs through tax deductions, just like previous generations did. Unfortunately, the tax landscape changed dramatically in 2018, and most people cannot deduct moving expenses on their federal tax returns. However, important exceptions exist for active-duty military members, and some states still allow moving deductions. Understanding exactly what you can and cannot claim prevents costly tax mistakes while ensuring you don't miss legitimate deductions that could save you hundreds or thousands of dollars.
As trusted NYC movers residents rely on, we've helped thousands of people relocate for jobs, military assignments, and personal reasons. We've seen the confusion around moving expense deductions firsthand, with many clients surprised to learn the rules changed several years ago. While we're not tax professionals, we can provide general guidance on what moving expenses to track and document, and when you might still qualify for deductions. This guide explains the current tax rules in plain English so you can plan your move budget accurately and work with your tax advisor to maximize any legitimate deductions available to you.
Here is who can claim what, based on the rules covered in this guide.
| Your situation | Federal return | State return |
|---|---|---|
| Civilian moving for a job, New York filer | No moving expense deduction | May subtract qualified expenses (S-135 on Form IT-225) if you meet the 50-mile and 39-week tests |
| Active-duty military moving under permanent change of station orders | Yes, on Form 3903 | Yes, qualifying military moves can also be claimed in New York |
| Civilian with employer-paid moving costs | Taxable wages on your W-2 | New York lets qualified employer reimbursements be subtracted too |
| New Jersey or Connecticut filer | No deduction for most civilians | Generally no, both follow federal treatment |
| Pennsylvania filer | No deduction for most civilians | Some costs on PA Schedule UE if the move is for your employer's convenience and your new workplace is 35+ miles farther |
The 2018 Tax Law Changes: What Happened
Before 2018, taxpayers who moved at least 50 miles for a new job could deduct qualified moving expenses on their federal tax returns using IRS Form 3903. This valuable deduction covered reasonable costs of moving household goods, traveling to the new location, and even some temporary lodging expenses. The deduction reduced your taxable income, potentially saving thousands in taxes depending on your moving costs and tax bracket.
The Tax Cuts and Jobs Act (TCJA) of 2017, which took effect for tax year 2018, suspended this deduction for most taxpayers through 2025. That suspension was originally set to end after 2025, but a 2025 federal law (P.L. 119-21, often called the One Big Beautiful Bill Act) made the limits permanent. This change caught many people by surprise, particularly those who had deducted moving expenses in previous years and expected to do so again. For most civilian taxpayers, there is no federal moving expense deduction for 2018 or any later year.
The reason for this change was revenue generation, eliminating popular deductions helped offset tax rate reductions elsewhere in the tax code. While individuals lost the moving expense deduction, the overall tax reform package included other provisions like increased standard deductions and lower tax brackets that benefited many taxpayers. However, for people facing expensive work-related moves, losing this deduction represents a genuine financial burden that wasn't adequately replaced by other tax benefits. Understanding NYC's overall cost of living helps contextualize how significant moving expenses are for people relocating to the city.
Who CAN Still Deduct Moving Expenses
Active-Duty Military Members
The primary exception to the 2018 rule change applies to members of the U.S. Armed Forces on active duty who move due to a military order and permanent change of station. If you're active-duty military relocating because of deployment, reassignment, or other official orders, you can still deduct qualified moving expenses on your federal tax return using Form 3903. This exception recognizes that military families move frequently due to service requirements beyond their control, often to high-cost areas where moving expenses are substantial. Starting with moves in 2026, employees and new appointees of the intelligence community who relocate because of a change in assignment may also be treated as Armed Forces members for moving expense purposes.
To qualify for this military exception, your move must result from a military order for a permanent change of station. Temporary assignments, training exercises, or voluntary relocations don't qualify. The move must occur in connection with your active-duty service, and you must be able to provide documentation of your orders. Reserve and National Guard members may qualify when called to active duty for more than 90 days, but should consult with a tax professional about their specific situation since rules vary based on duty status.
What Military Members Can Deduct
Active-duty military members moving under orders can deduct reasonable expenses including professional moving company costs for packing and transporting household goods, travel costs for yourself and household members to get to the new location (mileage at the standard rate or actual costs like gas and hotels), costs of connecting or disconnecting utilities, and shipping costs for vehicles or pets. These deductions can be substantial: a cross-country military move to or from NYC can easily generate $5,000 to $15,000 in deductible expenses.
Military members should keep detailed records of all moving-related expenses, including receipts, mileage logs, and copies of orders. Even if the military reimburses some expenses, you may still deduct unreimbursed costs. However, you cannot deduct expenses that were reimbursed tax-free by the military, only out-of-pocket costs qualify. Work with a tax professional familiar with military taxes to ensure you're claiming all eligible deductions while following IRS rules correctly.
State Tax Deductions: New York and New Jersey Rules
New York State Moving Expense Deduction
While federal deductions are unavailable for most taxpayers, New York State decoupled from this federal change. For tax years 2018 through 2025, New York lets you subtract qualified moving expenses you paid, and qualified moving expense reimbursements from your employer, on your state return. You claim it as subtraction modification S-135 on Form IT-225. To qualify, you generally must meet the old federal tests: your new main workplace must be at least 50 miles farther from your old home than your old workplace was, and you must work full time in the new area for at least 39 weeks during the 12 months after the move. Check the current Form IT-225 instructions to see whether the subtraction applies to later tax years.
Military members who qualify for federal moving expense deductions can also claim them on New York State returns. Some specific situations involving business relocations or self-employment may have different treatment under New York tax law, but these are complex scenarios requiring professional tax advice. If you're moving to NYC for work, ask your tax preparer whether the New York subtraction applies to you, and plan your budget assuming no federal deduction.
New Jersey and Other Neighboring States
Many NYC residents live in New Jersey and commute to the city, making New Jersey tax rules relevant for some movers. New Jersey also generally conforms to federal moving expense rules, meaning most civilians cannot deduct moving expenses on their New Jersey state tax returns. Connecticut generally follows federal treatment as well. Pennsylvania is different: it still allows some moving expenses as unreimbursed employee business expenses on PA Schedule UE, but only if the move is for your employer's convenience and your new workplace is at least 35 miles farther from your old home than your old workplace was.
A few states have decoupled from federal rules and kept some form of moving expense relief, including New York (through tax year 2025) and Pennsylvania. If you're considering living in New Jersey close to NYC or other nearby states, check that state's current rules with a tax professional before counting on any state tax benefit.
What Expenses WOULD Have Qualified (For Military and Future Reference)
Understanding what qualified as deductible moving expenses under the old rules helps military members (and, from 2026, eligible intelligence community employees) know what to track, and helps New York filers who may qualify for the state subtraction. Qualified moving expenses included professional moving company costs for packing, loading, transporting, and unloading household goods and personal effects. Storage costs for up to 30 consecutive days after moving out of your old home and before delivery to your new home also qualified.
Travel costs to your new location were deductible, including transportation for yourself and household members. If driving, you could deduct either actual expenses (gas, oil, tolls, parking) or the IRS standard mileage rate for moving (currently lower than the business mileage rate). Lodging expenses during the move qualified, though meals did not. Costs to connect or disconnect utilities at your old or new residence were also deductible.
Importantly, certain expenses never qualified even under the old rules and still don't qualify for military members. Non-deductible expenses include meals during the move, house-hunting trips before the move, temporary living expenses beyond one day of lodging en route, costs of breaking a lease, security deposits (these are recoverable, not true expenses), and any portion of moving costs reimbursed by your employer. Understanding these distinctions helps you track the right expenses and avoid claiming items that aren't legitimate deductions. For comprehensive information on all NYC moving costs, our guide on Hidden Moving Costs in NYC covers expenses many people overlook.
Employer Reimbursements and Tax Implications
How Employer-Paid Moving Expenses Are Treated
Before 2018, employer reimbursements for qualified moving expenses were tax-free for employees. You didn't report them as income, and the employer deducted them as business expenses. The 2018 tax law changed this significantly, and P.L. 119-21 made the change permanent. Now, if your employer pays for your move or reimburses your moving expenses, those payments are generally considered taxable income to you, unless you are active-duty military moving under orders or, from 2026, an eligible intelligence community employee. The amount appears on your W-2 as wages and is subject to federal income tax, Social Security tax, and Medicare tax, just like your regular salary.
This change means that a $5,000 moving reimbursement isn't worth $5,000 to you. It's worth $5,000 minus the taxes you'll pay on it. Depending on your tax bracket, you might net only $3,000 to $3,500 from a $5,000 reimbursement. Some employers adjusted their moving assistance programs to account for this, offering "grossed-up" payments that cover both the moving costs and the taxes on the reimbursement. However, many employers simply eliminated or reduced moving assistance programs because the tax treatment became less favorable.
Negotiating Moving Assistance
Understanding the tax implications helps you negotiate effectively when relocating for a new job. If an employer offers a moving package, ask whether the amount is grossed up to cover taxes or if you'll be responsible for the tax burden. A $10,000 moving package sounds generous, but if you're in the 24% federal tax bracket plus state taxes, you might net only $6,500-$7,000 after taxes, potentially insufficient to cover your actual moving costs to expensive NYC.
Consider negotiating for higher moving reimbursements that account for the tax hit, or for alternative benefits like signing bonuses or higher salary that provide more flexibility. Some employers offer relocation services directly rather than cash reimbursements, which may be more tax-efficient. Document everything in writing, and understand exactly how moving assistance will be reported and taxed before accepting a job offer. If you're moving to NYC without a job lined up, you'll bear all moving costs yourself with no reimbursement or tax benefits available.
What You Should Still Track and Document
Why Documentation Matters Even Without Deductions
Even though most people cannot deduct moving expenses, maintaining detailed records of your moving costs serves several important purposes. First, state rules such as New York's moving expense subtraction depend on receipts that show exactly what you paid, and good records let you amend a return if you later find you qualified. Second, if you're in a situation where deductions might apply (military service, certain business scenarios, state-specific rules), documentation is essential for claiming benefits.
Third, detailed cost tracking helps you manage your moving budget and potentially negotiate with employers. When you can show exactly how much your move cost, you have leverage to request reimbursement or additional compensation. Finally, documentation protects you in case of audits or disputes about the nature of expenses, being able to prove when and why costs were incurred prevents problems even if you're not claiming deductions.
What to Track
Keep comprehensive records of all moving-related expenses with the same diligence you would if deductions were available. Save receipts from professional moving companies, including estimates, contracts, and final invoices. Document all transportation costs including gas receipts if driving, airfare or train tickets, car rentals, and toll receipts. Keep hotel receipts if staying overnight during the move, mileage logs if driving your own vehicle (noting date, starting location, ending location, and miles driven), and receipts for packing supplies, boxes, bubble wrap, tape, and other materials.
Also document utility connection and disconnection fees, insurance costs related to the move, and storage facility receipts if temporarily storing belongings. For each expense, note the date, amount, vendor, and purpose. Organize receipts chronologically or by category, and consider using expense tracking apps or spreadsheets to maintain running totals. This level of documentation may seem excessive for non-deductible expenses, but it protects your interests and prepares you for any scenario where deductions become available. Understanding the full scope of moving costs also helps you plan accurately, our guide on reliable and affordable movers in NYC helps you budget for professional moving services.
Alternative Tax Strategies for Work-Related Moves
Self-Employed and Business Owners
If you're self-employed or own a business, different tax rules may apply to relocation expenses. Business owners moving their business operations may be able to deduct certain costs as ordinary and necessary business expenses rather than personal moving expenses. This distinction is crucial: business relocation costs can potentially be deducted on Schedule C (self-employed) or as business expenses for corporations, even though personal moving expenses are suspended.
However, the line between personal and business moving expenses is complex and heavily scrutinized by the IRS. You can generally deduct costs directly related to moving business assets, equipment, inventory, and establishing business operations in a new location. Personal household moves remain non-deductible even if you're self-employed. If you're relocating a business to or within NYC, work closely with a tax professional to identify which costs qualify as business expenses versus non-deductible personal moving costs. Improper classification can trigger audits and penalties.
Timing Strategies and Planning
While you can't deduct moving expenses, strategic timing of your move might offer other tax benefits. If your move involves changing jobs, consider timing employment transitions to maximize overall tax efficiency. Starting a new job early in the year gives you more time to contribute to retirement accounts at the new employer, potentially increasing tax-deferred savings. If relocating involves selling a home, understand the capital gains exclusion rules. You can exclude up to $250,000 ($500,000 married) of gain on your primary residence if you meet ownership and use tests.
Additionally, if moving for a job involves a significant salary increase, consider whether that increase might push you into a higher tax bracket and plan accordingly. Maximize pre-tax deductions like 401(k) contributions, HSAs, and other tax-advantaged accounts to offset higher income. While these strategies don't directly address moving expenses, holistic tax planning around a major relocation helps optimize your overall tax situation even without specific moving deductions.
Is the Federal Moving Deduction Coming Back?
No. The old suspension was scheduled to expire after December 31, 2025, but P.L. 119-21 (the One Big Beautiful Bill Act) made it permanent. The federal moving expense deduction and the tax-free treatment of employer moving reimbursements stay limited to active-duty Armed Forces members moving under a permanent change of station order. Starting with moves in 2026, employees and new appointees of the intelligence community who relocate because of a change in assignment may also be treated as Armed Forces members for moving expense purposes.
That means most civilian workers moving for a job should not expect the federal deduction to return. State rules are now the main place where some relief may still exist, so check your state's current instructions each tax year.
If you're planning a move, don't postpone it hoping for a federal tax break. Focus instead on negotiating employer assistance that covers the tax on any reimbursement, keeping good records, and asking a tax professional whether a state rule, such as New York's subtraction, applies to you.
Working with Tax Professionals
Given the complexity of tax law and the specific circumstances that can affect deductibility, working with a qualified tax professional is invaluable when making work-related moves. CPAs, enrolled agents, and tax attorneys can provide personalized guidance based on your employment situation, whether you qualify for any exceptions, and how state taxes interact with federal rules. They can also identify other tax strategies to offset moving costs even if direct deductions aren't available.
Bring your move documentation to tax consultations, explain the circumstances of your relocation, and ask specifically about any available deductions or credits. A good tax advisor will review your entire financial situation, not just moving expenses, and may identify opportunities you haven't considered. The cost of professional tax advice, typically $200-$500 for consultation, is money well spent when making expensive moves or facing complex tax situations. Don't rely solely on tax preparation software for unusual situations like major relocations, as these programs may not capture all the nuances of your circumstances.
Conclusion
The unfortunate reality for most people moving to or within NYC is that you cannot deduct moving expenses on your federal tax return. The 2018 tax law changes suspended this valuable deduction, and P.L. 119-21 made that permanent, leaving only active-duty military members (and, from 2026, eligible intelligence community employees) able to claim moving costs federally. New York filers who meet the distance and time tests may still be able to subtract qualified moving expenses on their state return for tax years 2018 through 2025. This means planning your moving budget should assume full out-of-pocket responsibility for all costs, with no tax relief available to offset expenses that can easily reach $5,000 to $15,000 or more for major relocations.
If you're in the military, take full advantage of the available deductions by documenting every qualified expense meticulously and working with a tax professional familiar with military tax situations. For everyone else, focus on strategies to minimize moving costs themselves rather than seeking tax deductions. Compare moving companies carefully, consider timing your move during off-peak seasons for better rates, and negotiate aggressively with employers for moving assistance, understanding that reimbursements will be taxable income.
While the lack of moving expense deductions is disappointing, don't let it derail necessary career moves or life transitions. The long-term benefits of a better job, career advancement, or improved quality of life typically far outweigh the short-term costs of moving, even without tax relief. Budget realistically, track your expenses carefully, and stay informed about federal and state tax rules that affect your move. With proper planning and realistic expectations, you can manage your NYC move successfully despite the current unfavorable tax treatment.
Ready to make your move to NYC as cost-effective as possible? Professional movers based in Brooklyn who understand budgeting concerns can help you maximize value while ensuring a smooth relocation. At Zeromax Moving, we provide transparent pricing, detailed quotes, and efficient service that helps you control costs even without tax deductions. We work with everyone from military families to corporate relocations to individual movers, and we understand how to make your moving budget stretch further. Contact us today for a free quote and let us show you how professional service doesn't have to break your budget.