When the military knocks, you leave. But when you move for that knocking, another consideration often goes unnoticed — your taxes. Most military personnel are unaware that military moves can still qualify for substantial tax deductions, which can keep more of your hard-earned cash in your pocket during a tough move.
Understanding the Military Move Deduction
For most Americans, the IRS removed moving expenses as a deduction. There is one exception, however. If your move is for a Permanent Change of Station (PCS), you are able to deduct some of the expenses the military did not pay.
These types of moves are:
- From home to your first duty station
- Between assignments
- From your final duty station home within one year of discharge
If Uncle Sam tells you to do it, the IRS still provides you with a break.
Deductions You May Have
The magic words are “unreimbursed expenses.” If the military did not cover it, it may be deductible, including:
- Shipping of household goods, cars, and personal effects
- Lodging while traveling to the new location
- Mileage for driving your own vehicle (using the IRS military relocation mileage rate)
- Storage temporarily in transit
- Shipping pets (in certain cases, if necessary to relocate)
Meals, house-hunting trips, or breaking a lease early aren’t deductible, even for active-duty military members.
How to Claim Your Deduction
When tax time rolls around, you will file IRS Form 3903 (Moving Expenses) with your annual tax return. Keep your PCS orders and all receipts, invoices, or mileage logs on file. Every dollar of documentation counts if the IRS comes calling later.
One positive habit is to maintain a “PCS binder” — a handy folder containing your orders, expense receipts, and reimbursement statements. It keeps you organized and prepared for an audit.
Reservists, Veterans, and Civilians
Reservists called up and needing to relocate can typically take the same deductibility. Defense contractors and veterans moving for defense employment aren’t eligible, though, since the 2018 Tax Cuts and Jobs Act suspended moving deductions for non-military taxpayers.
If you’re not sure which group you fit into, seek the opinion of a military tax expert or contact the Military OneSource tax consultation line for free advice.
Practical Example
Let us say Staff Sergeant Lopez receives PCS orders from Texas to Virginia. He travels 1,200 miles with his family and spends $200 on housing and $1,000 on moving expenses. The military contributes $800.
His deductible expenses would be:
($1,000 + $200) – $800 =$400 deductible moving expense
That $400 slices through taxable income — plain arithmetic that pays dividends.
Why It Matters
Military life imposes enough challenges in itself — endless transitions, deployments lasting months or more, and unfamiliar communities. Having your tax rights on your side is one way to simplify those challenges a bit. Each deduction does help to ease the financial burden of service, putting a reminder in front of families that their sacrifice will not be forgotten.
Serving your nation is something to be proud of. Saving in the process is just prudent.
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