Important Change
Standard mileage rate.
The standard mileage rate for moving expenses has been increased to 13 cents a mile. See Travel by car under Deductible Moving
Expenses.
Important Reminders
Change of address.
If you change your mailing address, be sure to notify the IRS using Form 8822, Change of Address. Mail it to the Internal Revenue
Service Center for your old address. Addresses for the Service Centers are on the back of the form.
Photographs of missing children.
The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children
selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the
photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
Introduction
This publication explains the deduction of certain expenses of moving to a new home because you changed job locations or started a new job. It
includes the following topics.
- Who can deduct moving expenses.
- What moving expenses are deductible.
- What moving expenses are not deductible.
- Tax withholding and estimated tax.
- How to report moving expenses.
An example, including a filled-in Form 3903, Moving Expenses, is shown near the end of the publication.
You may qualify for the moving expense deduction whether you are self-employed or an employee. Your expenses generally must be related to starting
work at your new job location. However, certain retirees and survivors may qualify to claim the deduction even if they are not starting work at a new
job location. See Who Can Deduct Moving Expenses.
Comments and suggestions.
We welcome your comments about this publication and your suggestions for future editions.
You can e-mail us while visiting our web site at www.irs.gov.
You can write to us at the following address:
Internal Revenue Service
Tax Forms and Publications
W:CAR:MP:FP
1111 Constitution Ave. NW
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in
your correspondence.
Useful Items You may want to see:
Publication
Form (and Instructions)
- 3903
Moving Expenses
- 8822
Change of Address
See How To Get Tax Help, near the end of this publication, for information about getting the publication and the forms listed.
Who Can Deduct Moving Expenses
You can deduct your moving expenses if your move is closely related to the start of work. You also must meet the distance test and the time test.
These two tests are discussed later. After you have read the time and distance test rules, you may want to use Figure B to help you decide
if your move qualifies for deducting your moving expenses.
Related to Start of Work
Your move must be closely related, both in time and in place, to the start of work at your new job location.
Closely related in time.
You can generally consider moving expenses incurred within 1 year from the date you first reported to work at the new location as closely related
in time to the start of work. It is not necessary that you arrange to work before moving to a new location, as long as you actually do go to work.
If you do not move within one year of the date you begin work, you ordinarily cannot deduct the expenses unless you can show that circumstances
existed that prevented the move within that time.
Example.
Your family moved more than a year after you started work at a new location. You delayed the move for 18 months to allow your child to complete
high school. You can deduct your moving expenses.
Closely related in place.
You can generally consider your move closely related in place to the start of work if the distance from your new home to the new job location is
not more than the distance from your former home to the new job location. A move that does not meet this requirement may qualify if you can show that:
- You are required to live at your new home as a condition of your employment, or
- You will spend less time or money commuting from your new home to your new job location.
Home defined.
Your home means your main home (residence). It can be a house, apartment, condominium, houseboat, house trailer, or similar dwelling. It
does not include other homes owned or kept up by you or members of your family. It also does not include a seasonal home, such as a summer beach
cottage. Your former home means your home before you left for your new job location. Your new home means your home within the
area of your new job location.
Retirees or survivors.
You may be able to deduct the expenses of moving to the United States or its possessions even if the move is not related to the start of work at a
new job location. You must have worked outside the United States or be a survivor of someone who did. See Retirees or Survivors Who Move to the
United States, later.
Distance Test
Your move will meet the distance test if your new main job location is at least 50 miles farther from your former home than your old
main job location was from your former home. For example, if your old main job location was 3 miles from your former home, your new main job location
must be at least 53 miles from that former home.
The distance between a job location and your home is the shortest of the more commonly traveled routes between them. The distance test considers
only the location of your former home. It does not take into account the location of your new home. See Figure A.
Figure A
Example.
You moved to a new home less than 50 miles from your former home because you changed main job locations. Your old main job location was 3 miles
from your former home. Your new main job location is 60 miles from that home. Because your new main job location is 57 miles farther from your former
home than the distance from your former home to your old main job location, you meet the distance test.
First job or return to full-time work.
If you go to work full time for the first time, your place of work must be at least 50 miles from your former home to meet the distance test.
If you go back to full-time work after a substantial period of part-time work or unemployment, your place of work also must be at least 50 miles
from your former home.
Armed Forces.
If you are in the Armed Forces and you moved because of a permanent change of station, you do not have to meet the distance test. See Members
of the Armed Forces, later.
Main job location.
Your main job location is usually the place where you spend most of your working time. If there is no one place where you spend most of your
working time, your main job location is the place where your work is centered, such as where you report for work or are otherwise required to
base your work.
Union members.
If you work for several employers on a short-term basis and you get work under a union hall system (such as a construction or building trades
worker), your main job location is the union hall.
More than one job.
If you have more than one job at any time, your main job location depends on the facts in each case. The more important factors to be considered
are:
- The total time you spend at each place,
- The amount of work you do at each place, and
- How much money you earn at each place.
Time Test
To deduct your moving expenses, you also must meet one of the following two time tests.
- The time test for employees.
- The time test for self-employed persons.
Both of these tests are explained below. See Table 1 for a summary of these tests.
Time Test for Employees
If you are an employee, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of
your new job location. Full-time employment depends on what is usual for your type of work in your area.
For purposes of this test, the following four rules apply.
- You count only your full-time work as an employee, not any work you do as a self-employed person.
- You do not have to work for the same employer for all 39 weeks.
- You do not have to work 39 weeks in a row.
- You must work full time within the same general commuting area for all 39 weeks.
Temporary absence from work.
You are considered to have worked full time during any week you are temporarily absent from work because of illness, strikes, lockouts, layoffs,
natural disasters, or similar causes. You are also considered to have worked full time during any week you are absent from work for leave or vacation
provided for in your work contract or agreement.
Seasonal work.
If your work is seasonal, you are considered to be working full time during the off-season only if your work contract or agreement covers an
off-season period and that period is less than 6 months. For example, a school teacher on a 12-month contract who teaches on a full-time basis for
more than 6 months is considered to have worked full time for the entire 12 months.
Time Test for Self-Employed Persons
If you are self-employed, you must work full time for at least 39 weeks during the first 12 months AND for a total of at least 78
weeks during the first 24 months after you arrive in the general area of your new job location.
For purposes of this test, the following three rules apply.
- You count any full-time work you do either as an employee or as a self-employed person.
- You do not have to work for the same employer or be self-employed in the same trade or business for the 78 weeks.
- You must work within the same general commuting area for all 78 weeks.
If you were both an employee and self-employed, see Table 1 for the requirements.
Example.
Justin quit his job and moved from the east coast to the west coast to begin a full-time job as a cabinet-maker for C and L Cabinet Shop. He
generally worked at the shop about 40 hours each week. Shortly after the move, Justin also began operating a cabinet-installation business from his
home for several hours each afternoon and all day on weekends. Because Justin's principal place of business is the cabinet shop, he can satisfy the
time test by meeting the 39-week test for employees.
If Justin is unable to satisfy the requirements of the 39-week test during the 12-month period immediately following his arrival in the general
location of his new principal place of work, he can satisfy the 78-week test.
Table 1. Satisfying the Time Test for Employees and Self-Employed Persons
| IF you are... |
THEN you satisfy the time test by meeting the... |
| an employee |
39-week test for employees. |
| self-employed and an employee but unable to satisfy the 39-week test for employees |
78-week test for self-employed persons. |
| both self-employed and an employee at the same time |
78-week test for a self-employed person or the 39-week test for an employee based on your principal place of work. |
| self-employed |
78-week test for self-employed persons. |
Figure A
Self-employment.
You are self-employed if you work as the sole owner of an unincorporated business or as a partner in a partnership carrying on a business. You are
not considered self-employed if you are semiretired, are a part-time student, or work only a few hours each week.
Full-time work.
You can count only those weeks during which you work full time as a week of work. Whether you work full time during any week depends on what is
usual for your type of work in your area.
Example.
You are a self-employed dentist and maintain office hours 4 days a week. You are considered to perform services full time if maintaining office
hours 4 days a week is not unusual for other self-employed dentists in the area.
Temporary absence from work.
You are considered to be self-employed on a full-time basis during any week you are temporarily absent from work because of illness, strikes,
natural disasters, or similar causes.
Seasonal trade or business.
If your trade or business is seasonal, the off-season weeks when no work is required or available may be counted as weeks during which you worked
full time. The off-season must be less than 6 months and you must work full time before and after the off-season.
Example.
You own and operate a motel at a beach resort. The motel is closed for 5 months during the off-season. You work full-time as the operator of the
motel before and after the off-season. You are considered self-employed on a full-time basis during the weeks of the off-season.
Joint return.
If you are married and file a joint return and both you and your spouse work full time, either of you can satisfy the full-time work test. However,
you cannot combine the weeks your spouse worked with the weeks you worked to satisfy that test.
Time test not yet met.
You can deduct your moving expenses on your 2002 tax return even if you have not yet met the time test by the date your 2002 return is due. You can
do this if you expect to meet the 39-week test in 2003 or the 78-week test in 2003 or 2004. If you deduct moving expenses but do not meet the time
test in 2003 or 2004, you must either:
- Report your moving expense deduction as other income on your Form 1040 for the year you cannot meet the test, or
- Amend your 2002 return.
Use Form 1040X, Amended U.S. Individual Income Tax Return, to amend your return.
If you do not deduct your moving expenses on your 2002 return, and you later meet the time test, you can file an amended return for 2002 to take
the deduction.
Example.
You arrive in the general area of your new job location on September 15, 2002. You deduct your moving expenses on your 2002 return, the year of the
move, even though you have not yet met the time test by the date your return is due. If you do not meet the 39-week test by September 15, 2003, you
must either:
- Report as income on your 2003 return the amount you deducted as moving expenses on your 2002 return, or
- Amend your 2002 return.
Exceptions to the Time Test
You do not have to meet the time test if one of the following applies.
- You are in the Armed Forces and you moved because of a permanent change of station. See Members of the Armed Forces, later.
- You moved to the United States because you retired. See Retirees or Survivors Who Move to the United States, later.
- You are the survivor of a person whose main job location at the time of death was outside the United States. See Retirees or Survivors
Who Move to the United States, later.
- Your job at the new location ends because of death or disability.
- You are transferred for your employer's benefit or laid off for a reason other than willful misconduct. For this exception, you must have
obtained full-time employment and you must have expected to meet the test at the time you started the job.
Figure B
Members of the Armed Forces
If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you do not have to meet the
distance and time tests, discussed earlier. You can deduct your unreimbursed moving expenses.
A permanent change of station includes:
- A move from your home to your first post of active duty,
- A move from one permanent post of duty to another, and
- A move from your last post of duty to your home or to a nearer point in the United States. The move must occur within one year of ending
your active duty or within the period allowed under the Joint Travel Regulations.
Spouse and dependents.
If a member of the Armed Forces dies, is imprisoned, or deserts, a permanent change of station for the spouse or dependent includes a move to:
- The place of enlistment,
- The member's, spouse's, or dependent's home of record, or
- A nearer point in the United States.
If the military moves you and your spouse and dependents to or from separate locations, the moves are treated as a single move to your new main job
location.
Services or reimbursements provided by government.
Do not include in income the value of moving and storage services provided by the government because of a permanent change of station. In general,
if the total reimbursements or allowances you receive from the government because of the move are more than your actual moving expenses, the
government should include the excess in your wages on Form W-2. However, the excess portion of a dislocation allowance, a temporary lodging
allowance, a temporary lodging expense, or a move-in housing allowance is not included in income.
If your reimbursements or allowances are less than your actual moving expenses, do not include the reimbursements or allowances in income. You can
deduct the expenses that are more than your reimbursements. See Deductible Moving Expenses, later.
How to complete Form 3903 for members of the Armed Forces.
Take the following steps.
- Complete lines 1 and 2, using your actual expenses. Do not include any expenses for moving services provided by the government.
Also do not include any expenses which were reimbursed by an allowance you do not have to include in your income.
- Enter on line 4 the total reimbursements and allowances you received from the government for the expenses claimed on lines 1 and 2. Do
not include the value of moving services provided by the government. Also do not include any part of a dislocation allowance, a temporary
lodging allowance, a temporary lodging expense, or a move-in housing allowance.
- Complete line 5. If line 3 is more than line 4, subtract line 4 from line 3 and enter the result on line 5 and on Form 1040, line 28. This
is your moving expense deduction. If line 3 is equal to or less than line 4, you do not have a moving expense deduction. Subtract line 3 from line 4
and, if the result is more than zero, enter it on Form 1040, line 7.
If the military moves you and your spouse and dependents to or from different locations, treat these moves as a single move.
Do not deduct any expenses for moving services provided by the government.
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