Limited Moving Expense Deduction

IRS Issues 2018 Version of Publication 969 on HSAs, HRAs, Health FSAs, and MSAs

The IRS has substantially revised Publication 521 (Moving Expenses) to reflect limitations on the moving expense deduction and the exclusion for moving expense reimbursements imposed by the Tax Cuts and Jobs Act. Those limitations suspended the deduction and exclusion for an eight-year period beginning in 2018, except for (1) members of the Armed Forces on active duty who move because of a permanent change of station and (2) certain moves by servicemembers’ spouses and dependents.

The 2018 version of Publication 521 eliminates material applicable only to moves by other employees, and moves into the main discussion information for members of the Armed Forces that previously appeared in a special section at the back. Discussions of the time and distance tests have been deleted, as have all references to the requirement that an employee’s move be closely related to the start of work. (Different rules apply to members of the Armed Forces and their families.) The publication’s description of deductible and non-deductible expenses—which, as a result, may or may not be reimbursed on a tax-free basis—is largely unchanged, but the examples have been revised to apply to servicemembers. The standard mileage rate used to calculate the moving expense deduction has been updated. And revisions to the section on reporting moving expense deductions, including the detailed example, conform to changes in Form 3903 (Moving Expenses) and Form 1040 for 2018.

Scroll to Top