Can You Claim Moving Expenses?

Moving homes can be an expensive affair, but Publication 521 published by the Internal Revenue Service (IRS) states that one could claim returns on moving expenses incurred. However, it further states that these claims can be made only if they fit the strict criteria where in some qualify and the others don’t.

The requirements specified in Publication 521 are as follows:
1. The move is to begin work.
2. You meet the distance test.
3. You meet the time test.

The move is in proximity to the start of the work:

This means that if you have moved homes due to work then you may be eligible to claim returns. At the same time, the move should be within 12 months and to a place closer to work or the job that required you to shift. If you fail to move within the year, you may no longer be eligible to claim returns unless of course you provide a valid reason. You can claim even if the distance from your new home to work is shorter than the distance from your old home to work, as long as the move took place because of the job.

You meet the distance test:

If your move is 50 miles or more in distance, away from your old home from the old job location, then you are eligible to claim for the expenses. To explain further the distance between your old home to new work and old home to old work must be 50 miles or more.

How To calculate this:

1. Calculate the miles from your old home to new place of work
2. Calculate the miles from your old home to old place of work
3. Subtract the above two and if it is more than 50 miles you are eligible.
(While calculating the shortest route is taken into consideration)

You meet the time test:

The time test has separate rules for employees and self employed people. To qualify for the time test it must meet the requirements of the corresponding category.

Claiming for Employees

For employees it states that you must work full-time for at least 39 weeks in a year at your new job, at the new destination. There is no need to work for 39 weeks continuously or with the same employer however it must be in the new location. This is also commonly reffered to as the 39-week test.

Claiming when Self Employed

For people self-employed, they are required to work full-time for at least 39 weeks in a year and a total of 78 weeks in the first 24 months at the new destination. This test is also known as the 78-week test.