Want your own number? Enter your household goods, storage, lodging and miles, and your code P reimbursement, to see your Form 3903 deduction and what it saves.
Open the Military Moving Expense Calculator →You can deduct moving expenses only if you are a member of the Armed Forces on active duty who moves under a military order because of a permanent change of station, or, starting in 2026, an intelligence community employee or new appointee relocating for a change in assignment. The deduction covers the unreimbursed cost of moving your household goods (with storage limited to 30 consecutive days unless the move is foreign) and of traveling to your new home, including lodging but not meals. You figure it on Form 3903, subtract government payments shown in Form W-2 box 12 code P, and report the result on Schedule 1 line 14, so it lowers your AGI even if you take the standard deduction. Dislocation and temporary lodging allowances are already tax-free and are not subtracted.
- Permanent for civilians: the suspension of the moving expense deduction no longer ends after 2025; only service members on PCS orders and, from 2026, qualifying intelligence community employees can deduct.
- PCS covers three moves: to your first post of duty, between permanent posts, and from your last post to home within 1 year of leaving active duty.
- Two buckets: household goods and storage (line 1), and travel and lodging for one trip per household member (line 2).
- Mileage: 21¢ for 2025; 20.5¢ for January to June 2026 and 23.5¢ from July 1, 2026.
- Tax-free allowances: dislocation allowance, TLE, TLA, MIHA and government-arranged moves are excluded and not entered on Form 3903.
- Code P only: subtract only government payments not included in box 1; any excess over your costs is income.
- No itemizing: it is an adjustment to income on Schedule 1 Part II.
Who Can Still Deduct Moving Expenses?
The moving expense deduction lives in IRC section 217. The Tax Cuts and Jobs Act added subsection (k), which switched the deduction off for tax years 2018 through 2025 "except in the case of an individual to whom subsection (g) applies." Subsection (g) covers "a member of the Armed Forces of the United States on active duty who moves pursuant to a military order and incident to a permanent change of station."
Section 70113 of the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) changed two things for tax years beginning after December 31, 2025:
- The suspension is permanent. The words "and before January 1, 2026" were struck, so civilian employees and self-employed people do not get the deduction back in 2026 or later.
- The intelligence community was added. New IRC 217(k)(2) treats an employee or new appointee of the intelligence community (other than a member of the Armed Forces) who moves because of a change in assignment that requires relocation the same as a service member under subsection (g).
For qualifying movers the old distance and time tests in IRC 217(c), the 50-mile and 39-week rules most people remember, do not apply. What matters is the order and the permanent change of station.
What Counts as a Permanent Change of Station?
The Form 3903 instructions and IRS Publication 3 define a permanent change of station as:
- A move from your home to your first post of duty when appointed, reappointed, reinstated or inducted.
- A move from one permanent post of duty to another permanent post of duty.
- A move from your last post of duty to your home or to a nearer point in the United States, if it happens within 1 year of ending active duty or within the period allowed under the Joint Travel Regulations.
If you are the spouse or dependent of a member who deserts, is imprisoned or dies, a permanent change of station for you also includes a move to the member's place of enlistment or induction, your or the member's home of record, or a nearer point in the United States. If the military moves you and your family to or from different locations, the moves are treated as a single move to your new main job location. If you qualify for more than one move in a year, you use a separate Form 3903 for each.
Which Moving Expenses Are Deductible?
You can deduct the reasonable unreimbursed expenses of moving yourself and the members of your household. A household member is anyone who has both your former home and your new home as their main home; it does not include a tenant or an employee such as a nanny unless you can claim that person as a dependent. The expenses fall into two lines on Form 3903.
Line 1: Moving household goods and storage
- Packing, crating and hauling your household goods and personal effects, including hauling a trailer.
- In-transit storage and insurance.
- Storing and insuring your goods within any period of 30 consecutive days after they leave your former home and before they are delivered to your new home.
You cannot deduct the cost of moving furniture or other goods you bought on the way from your old home to your new home.
Line 2: Travel to the new home
- Lodging on the way, including the day you arrive.
- Airfare, train or bus fares, or car expenses, for one trip per person. Household members do not have to travel together or at the same time.
- Parking fees and tolls.
Car expenses are either your actual out-of-pocket gas and oil, if you keep an accurate record of each expense, or the standard mileage rate for moving. General repairs, maintenance, insurance and depreciation are not deductible under either method.
What Is the Military Moving Mileage Rate for 2025 and 2026?
| Miles driven | Rate | Source |
|---|---|---|
| 2025 | 21 cents a mile | Form 3903 instructions; IR-2024-312 |
| January 1 to June 30, 2026 | 20.5 cents a mile | Notice 2026-10; IR-2025-128 |
| July 1 to December 31, 2026 | 23.5 cents a mile | Announcement 2026-11 (IRB 2026-29) |
The mid-year change is unusual. IRS Announcement 2026-11 modified Notice 2026-10 "from recent increases in the price of fuel," raising the medical and moving rate to 23.5 cents for expenses paid or incurred on or after July 1, 2026. A PCS drive that starts in late June and ends in July uses both rates: count the miles driven before July 1 at 20.5 cents and the rest at 23.5 cents. For example, 1,200 miles with 400 driven after July 1 is $164.00 + $94.00 = $258.00, plus parking and tolls.
What Can't You Deduct?
The Form 3903 instructions list the costs that are never moving expenses, even for a qualifying PCS:
- Meals on the trip, unnecessary side trips, and lavish or extravagant lodging.
- House hunting trips and return trips to your former residence.
- Any part of the purchase price of your new home, and the costs of buying or selling a home, including closing costs, mortgage fees, points and mortgage penalties.
- Entering into or breaking a lease, and security deposits, including any you forfeit because of the move.
- Home improvements to help sell your home, a loss on the sale, and real estate taxes.
- Car tags and driver's licenses.
- Refitting carpet and draperies, and losses from giving up club memberships.
- Storage charges other than in-transit storage and storage on a foreign move.
- Anything the government moved for you, or that was reimbursed by an allowance you did not include in income.
Have your receipts and Form W-2 in hand? Run the numbers line by line, including the July 1, 2026 mileage split and any excess reimbursement.
Calculate Your PCS Deduction →How Do Government Allowances and Code P Work?
This is where most PCS returns go wrong. IRS Publication 3 sorts what the government gives you into three groups.
Excluded and never entered
"Don't include in your income the value of moving and storage services provided by the government because of a permanent change of station. Similarly, don't include in income amounts received as a dislocation allowance, temporary lodging expense, temporary lodging allowance, or move-in housing allowance." These do not appear on Form 3903 at all, and the instructions say not to include any part of them on line 4. If your family is moved to or from a different location than you, the reimbursements, allowances and government moving services for those separate moves are also excluded.
Excluded reimbursements shown with code P
Other reimbursements and allowances for the expenses on lines 1 and 2 that are not included in your wages appear in Form W-2 box 12 with code P. That amount goes on Form 3903 line 4 and is subtracted from your expenses. If line 3 is more than line 4, the difference is your deduction. If line 3 is equal to or less than line 4, you have no deduction, and any amount by which line 4 exceeds line 3 is included in income on Form 1040 line 1h.
Reimbursements included in box 1
Generally, if your total government reimbursements are more than your actual moving expenses, the excess is included in your wages on Form W-2. A payment already counted in box 1 has been taxed as wages, so it is not entered on line 4 and does not reduce your deduction. Your documented costs are deductible against it.
How Are Foreign Moves Different?
A foreign move is a move from the United States or its territories to a foreign country, or from one foreign country to another. For this purpose a U.S. military base is not a U.S. territory, so a move to a base in Germany, Japan or Korea is a foreign move. A move from a foreign country back to the United States is not.
On a foreign move the deductible expenses expand to include moving your household goods and personal effects to and from storage, and storing them for all or part of the time the new job location outside the United States remains your main job location. The 30-day storage limit does not apply.
There is a special case for storage alone. If you moved in an earlier year, are claiming only storage fees during your absence from the United States, and the government's payment for the storage is included in box 1 of your Form W-2, you do not file Form 3903. Instead, enter the storage fees on Schedule 1 line 14 and check the storage fees box next to that line. If you file Form 2555 to exclude foreign earned income or housing, the part of the deduction allocable to the excluded income is not allowed; IRS Publication 54 explains the allocation.
How Do You Claim the Deduction on Form 3903?
- Check the certification box at the top of Form 3903 stating that you meet the requirements. On the 2025 form that statement covers only active-duty Armed Forces members moving on a permanent change of station. The IRS 2026 draft form adds "a Member of the Intelligence Community who moves due to a change in assignment that requires relocation," so intelligence community filers should follow the final 2026 form and its instructions once they are released.
- Line 1: household goods, in-transit storage and insurance, and storage within 30 consecutive days (all storage on a foreign move), leaving out anything the government provided.
- Line 2: lodging, fares, car costs, parking and tolls, with no meals and no house hunting.
- Line 4: the code P amount from Form W-2 box 12.
- Line 5: line 3 minus line 4, carried to Schedule 1 (Form 1040) line 14.
Line 14 sits in Part II of Schedule 1 with the other adjustments to income. IRC 62(a)(15) lists the section 217 deduction among the items subtracted to reach adjusted gross income, so it lowers AGI and you claim it whether you itemize or take the standard deduction. You deduct the expenses in the year you paid or incurred them. If you make estimated tax payments, the Form 3903 instructions remind you to account for taxable reimbursements and deductible moving expenses when you figure them.
What Changed for the Intelligence Community in 2026?
Starting with tax years beginning after December 31, 2025, IRC 217(k)(2) lets "an employee or new appointee of the intelligence community (as defined in section 3 of the National Security Act of 1947 (50 U.S.C. 3003)) (other than a member of the Armed Forces of the United States) who moves pursuant to a change in assignment which requires relocation" deduct moving expenses in the same manner as a service member. Section 70113(d) made the matching change to the exclusion for employer-paid moving reimbursements in IRC 132(g)(2).
The 2026 draft of Form 3903 already reflects this: its eligibility statement adds "a Member of the Intelligence Community who moves due to a change in assignment that requires relocation." It cannot be claimed on a 2025 return; it applies to expenses deducted in tax years beginning after December 31, 2025. Service members are covered under the Armed Forces rule, not the intelligence community rule.
What About Civilian Moves for a New Job?
If you are not a service member or a qualifying intelligence community employee, you cannot deduct moving expenses for 2018 or any later year. The exclusion for qualified moving expense reimbursements in IRC 132(g) was limited the same way and that limit is also permanent, so moving payments from a civilian employer are taxable wages included in box 1 of your Form W-2. A relocation package is income, and the costs it covers are personal. If you are weighing a job offer with a relocation payment, plan on paying income and payroll taxes on it.
Practitioner Insight (LMN Tax Inc.)
The PCS returns we correct most often have one error in common: line 4 is too big. Members subtract everything on the travel voucher, including the dislocation allowance and temporary lodging money. Those allowances are excluded by law and the instructions say to leave them off line 4. Subtracting them erases a deduction the member is entitled to. Our rule is to enter the box 12 code P figure and nothing else.
The second is meals. Per diem on a voucher bundles meals with lodging, but only the lodging is deductible. We take meals out before we total line 2.
The third is a June-to-July drive in 2026. Because the mileage rate rose on July 1, we split the odometer log at June 30 rather than applying one rate to the whole trip.
Finally, check prior years. A member who skipped the deduction for a PCS in an earlier year can usually still claim it on an amended return within the three-year window, and the refund is often worth the paperwork.
Real-World Scenarios
When the Rules Differ
- Reserve and Guard members. The deduction requires active duty and a military order for a permanent change of station; a move for training or temporary duty is not a PCS.
- Leaving the service. The move home must be within 1 year of ending active duty or within the period allowed under the Joint Travel Regulations.
- Earlier-year storage only. If you moved in an earlier year, are claiming only storage fees during your absence from the U.S., and the government's payment for that storage is included in box 1 of your Form W-2, the fees go straight to Schedule 1 line 14 with the storage box checked, without Form 3903. Otherwise, use Form 3903 so reimbursements not in box 1 are subtracted.
- Form 2555 filers. The part of the deduction allocable to excluded foreign earned income is not allowed.
- State returns. States set their own rules on moving expenses and on military pay; check the return for each state you file in.
- The 2026 final form. The 2026 Form 3903 is still in draft; its final instructions may add detail, particularly for intelligence community movers.
Frequently Asked Questions
What to Do Next
Enter your costs and code P amount in the Military Moving Expense Calculator to see Form 3903 line by line.
The deduction reduces adjusted gross income. The AGI Calculator shows the new figure.
The Amended Tax Return Guide explains Form 1040-X and the deadline for claiming a refund.
Medical, charitable and business mileage rules are in the Mileage Deduction Guide.
Related Tools and Guides
- IRS Instructions for Form 3903 (2025) - Permanent change of station, household members, deductible and nondeductible expenses, 30-day storage, foreign moves, excluded allowances, line-by-line instructions, the storage-fee-only rule and Form 2555 filers.
- IRS - About Form 3903, Moving Expenses - Form 3903 (2025); the 2026 draft adds intelligence community relocations to the eligibility statement.
- IRS Publication 3 - Armed Forces' Tax Guide - Moving expenses, excluded government services and allowances, excess reimbursements and Schedule 1 line 14.
- IRS - Standard Mileage Rates - Military moving rates for 2025 and both halves of 2026.
- Internal Revenue Bulletin 2026-29, Announcement 2026-11 - 23.5 cents a mile for moving on or after July 1, 2026.
- 26 U.S.C. 217 - Moving expenses - Subsections (g) and (k).
- 26 U.S.C. 62 - Adjusted gross income defined - Paragraph (a)(15), the moving expense deduction.
- Public Law 119-21, section 70113 - Permanent limitation on the moving expense deduction and exclusion and the intelligence community allowance.