Form 3903: Moving Expenses Definition & Overview

KEY TAKEAWAYS

• Only military personnel may utilize Form 3903 for tax years beginning after 2017.
• Those who have made several job-related relocations must complete several forms.
• A taxpayer’s new place of employment must be at least 50 miles away from their previous place of employment.

What Is Form 3903?

Form 3903 is a tax form produced by the Internal Revenue Service (IRS) that people use to write off moving expenses associated with new employment. 

Moving costs are no longer deductible for tax years starting after 2017 unless you are an active duty member of the military who is moving as a result of a permanent change of station as per a military order.

What Is the Purpose of Form 3903?

The requirements for claiming the relocation expense tax deduction were modified by the 2017 Tax Cuts and Jobs Act. Moving expenditures are no longer deductible for the majority of taxpayers, therefore you cannot deduct them on your federal return. For the tax years 2018 through 2025, this modification will remain in effect.

However, you might be eligible for a deduction if you need to amend a prior return filed before tax reform or if you are an active military member and meet certain requirements. Provided neither of these applies to you, you might still want to keep track of your spending since certain states still allow you to deduct some expenses from your state tax return if you meet certain criteria.

Who Can File Form 3903?

The IRS permitted taxpayers to utilize this form to write off additional, justifiable moving costs, such as the cost of hiring professional movers or accompanying travel costs.

Form 3903 was used for each eligible move a taxpayer made in a tax year previous to 2018, therefore taxpayers who made multiple job-related moves had to complete multiple forms. The IRS permitted taxpayers to utilize this form to write off additional, justifiable moving costs, such as the cost of hiring professional movers or accompanying travel costs.

Even for tax years before 2018, filing Form 3903 was only possible provided you complied with specific requirements. First, you had to commute at least 50 miles farther to your new work than you did to your old one.

How to File Form 3903

Prior to 2018, you had to pass a qualifying time and distance test to see if you qualified for a move-related expense deduction. Only US military personnel who are currently on active duty are eligible to use Form 3903. Armed forces personnel who take advantage of the deductions are not subject to any qualifying time or distance requirements.

Which Are the Deductible Moving Expenses?

The following expenses qualify for Form 3903:

• The price of moving blankets, bubble wrap, tape, boxes, and other supplies needed for packing
• Rent for storage costs and moving trucks
• Travel expenses, such as airfare, fuel charges, mileage, and lodging expenditures
• The price of transporting additional family members in a different car
• Parking fees

Which Are the Non-Deductible Moving Expenses?

House seeking visits, charges associated with signing a lease or breaking it, and expenses related to purchasing or selling a home are among expenses that are typically not deductible. You cannot deduct the cost of what the IRS views to be excessive lodging or unnecessary side trips while going from your old house to your new one.

Summary

Taxpayers can deduct moving expenses related to a new job by using Form 3903, a tax form created by the Internal Revenue Service (IRS).

For tax years 2018-2025, only active-duty members of the U.S. Armed Forces may still deduct moving costs if they were incurred in response to a military order mandating a permanent change of station.

It’s important to remember that you cannot deduct relocation costs if you were reimbursed by the government. If your reimbursement is more than the moving expenses you incurred, the government will include the excess in your W-2 wages. If your reimbursement amount is less than incurred moving costs, you can deduct the difference.

Written by Sandra Habiger, CPA

Sandra Habiger is a Chartered Professional Accountant with a Bachelor’s Degree in Business Administration from the University of Washington. Sandra’s areas of focus include advising real estate agents, brokers, and investors. She supports small businesses in growing to their first six figures and beyond. Alongside her accounting practice, Sandra is a Money and Life Coach for women in business.

Written by Sandra Habiger, CPA

Sandra Habiger is a Chartered Professional Accountant with a Bachelor’s Degree in Business Administration from the University of Washington. Sandra’s areas of focus include advising real estate agents, brokers, and investors. She supports small businesses in growing to their first six figures and beyond. Alongside her accounting practice, Sandra is a Money and Life Coach for women in business.