IRS Form 3903: The complete guide to claiming moving expenses for active-duty military

When it comes to taxes, deductions are a great way to reduce the amount you owe and potentially increase your refund.

One such deduction that could make a big difference, especially if you’ve had to relocate for a job, is moving expenses. However, with the passage of the Tax Cuts and Jobs Act of 2017, claiming these expenses became a bit trickier.

Prior to this change, many taxpayers could deduct moving expenses when relocating for a new job. But now, unless you’re an active-duty military member, most taxpayers can’t take advantage of this deduction between 2018 and 2025.

This shift has left many wondering if they’re eligible to claim moving-related expenses and how to go about it if they are.

This is where Form 3903 comes into play. For those eligible – primarily military personnel – it’s the go-to form for reporting and deducting moving expenses. So, whether you're part of the military making a PCS move or just curious about what’s deductible, let’s break it all down.

What is Form 3903?

Quick summary: A form for reporting moving expenses

Form 3903 is the official IRS form used to report moving expenses related to job relocation. However, here’s the twist: due to tax reform under the Tax Cuts and Jobs Act of 2017, the ability to claim moving expenses has been largely limited to active-duty military members.

If you’re a member of the armed forces, Form 3903 is your ticket to deducting expenses like shipping household goods, travel costs, and storage fees.

For everyone else, the road to claiming moving expenses was blocked by the changes in tax law, and you’ll need to look elsewhere for deductions.

The big change: Tax years 2018–2025

For tax years 2018 through 2025, the ability to deduct moving expenses is off the table for most taxpayers – unless you’re active-duty military. The only folks left with this benefit are those who are relocating due to a permanent change of station (PCS).

Let’s look at a brief history:

• Pre-2018: Taxpayers could deduct moving expenses if their move was for work, as long as it met the distance and time tests.
• Post-2017: Military personnel are the sole group that can still claim these deductions, thanks to an exception in the law.

The main reason for this change?

The tax reform was intended to simplify and reduce certain deductions, especially in cases where the government felt it was no longer necessary to incentivize moving for work-related purposes.

Who needs to file Form 3903?

Required if...

1. You’re an active-duty military member moving due to a permanent change of station (PCS). If you’re part of the military, congratulations! You’re still eligible to deduct moving expenses. Form 3903 is for you.
2. You have unreimbursed moving expenses for shipping, storage, lodging, and travel related to the move. Only report expenses you paid out of pocket. If the military or another organization reimburses you, those costs aren’t eligible.

So, if you’re in the military and are moving because of orders, or if you’ve paid for the costs associated with your move (like lodging or gas) without receiving reimbursement, Form 3903 is the form you’ll want to fill out.

Not required if...

1. You moved for a job change after 2017 (unless you’re active-duty military). Sorry, non-military folks. The 2017 tax reform wiped out this deduction for most taxpayers.
2. Your moving expenses were reimbursed or paid for by your employer or the government. If someone else picked up the tab for your move, you’re not allowed to claim those expenses on Form 3903. That’s a no-go.
3. You’re not active-duty military and didn’t move for a job. Personal moves or relocations for reasons other than a job will not qualify for moving expense deductions under current tax law.

What qualifies as moving expenses?

Here’s the million-dollar question: what exactly can you deduct if you are eligible?

Well, for active-duty military personnel, here’s a breakdown of the moving expenses you can claim:

Deductible expenses for military personnel

• Shipping household goods and personal effects: Whether you’re moving a small studio or a 5-bedroom house, the cost of transporting your personal belongings to your new station is deductible.
  This includes moving trucks, shipping costs, and even the packing materials (bubble wrap anyone?).
• Travel expenses (gas, tolls, lodging): During your move, you’re allowed to deduct the cost of traveling to your new home. This includes gas, parking, tolls, and even overnight lodging (but no meals, sorry!).
• Temporary storage costs: If your household items need to be stored temporarily before arriving at your new home, that cost can also be deducted. Think of it as a short-term rental for your belongings.

What doesn’t qualify

Of course, not everything about your move is deductible.

Here’s what doesn’t make the cut:

• Meals during the move: You can’t deduct the cost of that fast food meal you had on the way. The IRS specifically excludes meals from deductible moving expenses.
• Reimbursed costs: If your employer or the government reimbursed you for moving expenses, you cannot deduct those same expenses on your tax return. Double dipping is a no-no.
• Personal moves for non-job reasons: If you’re just relocating because you want a change of scenery or for personal reasons, unfortunately, you can’t claim those expenses – unless you fall under the military exception.

 

In summary, for military personnel, Form 3903 allows you to claim the essential costs of relocating due to a permanent change of station, including the shipping of household goods, travel, and storage. However, you need to be mindful that things like meals and reimbursed expenses are not eligible for deductions.

How to complete Form 3903

Filling out Form 3903 might feel like a chore, but if you’re an active-duty military member or you’re eligible to deduct moving expenses, the process can be straightforward.

Here’s a breakdown of each part of the form:

Part I – Transportation and storage costs

In this section, you’ll report the costs associated with shipping your household goods and personal effects as well as temporary storage.

• Shipping Household Goods: Include costs for moving companies, truck rentals, and any professional help you hired to get your belongings from point A to point B.
• Storage: If your belongings had to be stored temporarily (e.g., in a storage unit or warehouse), you can deduct those costs as well.

Think of this part as the “heavy lifting” section, as it’s where you’ll document the bulk of your moving expenses.

Part II – Travel expenses

This section covers travel-related expenses incurred during your move, and it’s pretty straightforward. You’ll report costs like:

• Gas: Track the mileage of your vehicle and calculate your gas expenses.
• Parking: If you had to pay for parking along the way, include that here.
• Tolls: Don’t forget to track tolls that you paid en route to your new home.
• Lodging: If you had to stay overnight during your move, you can deduct the cost of hotels or other temporary accommodations.

NOTE! Keep in mind that meals are not deductible – this is a travel expense section, not a restaurant receipt section.

Part III – Reimbursements

Here’s the catch: if your employer or the government reimbursed any part of your moving expenses, you need to report these reimbursements in Part III of the form.

This ensures the IRS knows that you didn’t pay for all your moving costs out of pocket.

• Report reimbursements received from your employer (usually shown in Box 12 of your W-2, Code P).
• If your reimbursements exceeded your total expenses, the excess will need to be reported as taxable income.

The IRS has a strict “no double-dipping” policy, so it’s essential to accurately report these reimbursements.

Pro tip: The more accurate your records and receipts, the smoother this process will go. Don’t rely on memory – make sure to keep all your documentation handy.

Form 3903 preview

Consequences of not filing Form 3903 when required

You might think, “What’s the big deal if I forget to file Form 3903 or misreport my moving expenses?”

Well, it turns out there is a big deal, and it can cost you.

IRS notices and penalties

Failing to file Form 3903 or incorrectly reporting moving expenses can lead to a few unpleasant outcomes, including:

• IRS notices: If you don’t report moving expenses when required, the IRS might flag your return, leading to unnecessary delays or audits.
• Penalties: In some cases, you could face penalties for misreporting or failing to file the form. It's best to avoid this headache by filing correctly the first time.

Amending your return: How to correct mistakes

Made an error or forgot to file Form 3903? Don’t panic! You can always amend your tax return using Form 1040-X.

Here’s how:

1. Download and complete Form 1040-X (Amended US Individual Income Tax Return).
2. Correct any errors related to your moving expenses and any additional reimbursements you failed to report earlier.
3. Submit the amended return to the IRS.

While it’s great that amending is an option, it’s much easier (and less stressful) to get it right the first time.

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Impact on refunds

If you miss file or incorrectly report your moving expenses, your refund may be delayed. The IRS will need to review your information and could even hold up your refund until they’ve processed your corrected filing.

NB! It’s always better to be thorough and get your deductions right to avoid unnecessary waiting.

Where to report moving expenses if Form 3903 isn’t required

Form 3903 is for military personnel who are still eligible for moving expense deductions. But what if you’re ineligible for this form and still have moving-related expenses?

Here’s what to do:

Schedule 2 (Form 1040), Line 10: Ongoing Repayments for Previous Moves

If you’re still repaying a previous move (maybe it’s part of a multi-year repayment plan), those expenses should be reported on Schedule 2 (Form 1040), Line 10.

This line allows you to continue reporting deductions related to prior moving expenses, including payments that are spread over multiple years.

• If you moved before 2018 and are still making repayments, you’ll use Line 10 for this reporting.
• For taxpayers after 2018, moving expenses no longer qualify unless they fall under the military exemption. However, if you’re still repaying a prior move, this method allows you to stay in compliance with the IRS rules.

What if Form 3903 isn’t required for you?

If you’re not part of the military or your move wasn’t job-related (and thus you’re not using Form 3903), you’re likely out of luck when it comes to claiming moving expenses.

However, always double-check with a tax professional, as there may be specific state-level deductions or exceptions that could apply.

Pro tips for avoiding issues

Filing taxes is complicated, and making sure everything is in order can be a headache.

Here are some pro tips to ensure you don’t run into issues with Form 3903 or your moving expenses:

Keep good records

Track every single moving-related expense you incur and keep receipts for everything from packing supplies to hotel stays.

The more accurate your records, the easier the filing process will be.

Verify your eligibility

Before you start filling out Form 3903, double-check whether you’re eligible to claim moving expenses.

If you’re not in the military and your move isn’t work-related, you may not be able to claim any deductions.

Stay up to date with tax laws

Tax laws change frequently, and moving expense rules are no exception. Always stay updated on any changes, when the current rules may evolve.