You can deduct your allowable moving expenses if your move is closely related to the start of work. You also must meet the distance test and the time test. These two tests are discussed later.

Retirees or survivors. You may be able to deduct the expenses of moving to the United States or its possessions even if the move is not related to a new job. You must have worked outside the United States or be a survivor of someone who did. See Retirees or Survivors Who Move to the United States, later.

Related to Start of Work

Your move must be closely related, both in time and in place, to the start of work at your new job location.

Closely related in time. You can generally consider moving expenses incurred within one year from the date you first reported to work at the new location as closely related in time to the start of work. It is not necessary that you arrange to work before moving to a new location, as long as you actually do go to work.

If you do not move within one year of the date you begin work, you ordinarily cannot deduct the expenses unless you can show that circumstances existed that prevented the move within that time.

Example. Your family moved more than a year after you started work at a new location. You delayed the move for 18 months to allow your child to complete high school. You can deduct your allowable moving expenses.

Closely related in place. You can generally consider your move closely related in place to the start of work if the distance from your new home to the new job location is not more than the distance from your former home to the new job location. A move that does not meet this requirement may qualify if you can show that:

1. You are required to live at that home as a condition of your employment, or
2. You will spend less time or money commuting from your new home to your new job.

Figure A

Distance Test

Your move will meet the distance test if your new main job location is at least 50 miles farther from your former home than your old main job location was from your former home. For example, if your old main job was 3 miles from your former home, your new main job must be at least 53 miles from that former home.

The distance between a job location and your home is the shortest of the more commonly traveled routes between them. The distance test considers only the location of your former home. It does not take into account the location of your new home. See Figure A.

Example. You moved to a new home less than 50 miles from your former home because you changed main job locations. Your old main job was 3 miles from your former home. Your new main job is 60 miles from that home. Because your new main job is 57 miles farther from your former home than the distance from your former home to your old main job, you meet the 50-mile distance test.

First job or return to full-time work. If you go to work full time for the first time, your place of work must be at least 50 miles from your former home to meet the distance test. If you go back to full-time work after a substantial period of part-time work or unemployment, your place of work also must be at least 50 miles from your former home.

Exception for Armed Forces. If you are in the Armed Forces and you moved because of a permanent change of station, you do not have to meet the distance test. See Members of the Armed Forces, later.

Main job location. Your main job location is usually the place where you spend most of your working time. A new job location is a new place where you will work permanently or indefinitely rather than temporarily. If there is no one place where you spend most of your working time, your main job location is the place where your work is centered, such as where you report for work or are otherwise required to "base" your work.

Union members. If you work for several employers on a short-term basis and you get work under a union hall system (such as a construction or building trades worker), your main job location is the union hall.

More than one job. If you have more than one job at anytime, your main job location depends on the facts in each case. The more important factors to be considered are:

• The total time you spend at each place,
• The amount of work you do at each place, and
• How much money you earn at each place.

Time Test

To deduct your moving expenses, you also must meet one of the following time tests. See Table 1.

Time test for employees. If you are an employee, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location. For this time test, count only your full-time work as an employee; do not count any work you do as a self-employed person. You do not have to work for the same employer for the 39 weeks. You do not have to work 39 weeks in a row. However, you must work full time within the same general commuting area. Full-time employment depends on what is usual for your type of work in your area.

Temporary absence from work. You are considered to be a full-time employee during any week you are temporarily absent from work because of illness, strikes, lockouts, layoffs, natural disasters, or similar causes. You are also considered a full-time employee during any week you are absent from work for leave or vacation provided for in your work contract or agreement.

Seasonal work. If your work is seasonal, you are considered to be working full time during the off season only if your work contract or agreement covers an off-season period and that period is less than 6 months. For example, a school teacher on a 12-month contract who teaches on a full-time basis for more than 6 months is considered a full-time employee for the entire 12 months.

Time test for self-employed persons. If you are self-employed, you must work full time for at least 39 weeks during the first 12 months AND for a total of at least 78 weeks during the first 24 months after you arrive in your new job location. For this time test, count any full-time work you do as an employee or as a self-employed person. You do not have to work for the same employer or be self-employed in the same trade or business for the 78 weeks, but you do have to work in the same general commuting area.

Table 1. 39-week and 78-week test for employees and self-employed persons

Self-employment. You are self-employed if you work as the sole owner of an unincorporated business or as a partner in a partnership carrying on a business. You are not considered self-employed if you are semiretired, are a part-time student, or work only a few hours each week.

Full-time work. You can only count those weeks you work full time as a week of work. Whether you work full time during any week depends on what is usual for your type of work in your area. For example, you are a self-employed dentist and maintain office hours 4 days a week. You are considered to perform services full time if maintaining office hours 4 days a week is not unusual for other self-employed dentists in the area.

Temporary absence from work. You are considered to be self-employed on a full-time basis during any week you are temporarily absent from work because of illness, strikes, natural disasters, or similar causes.

Seasonal trade or business. If your trade or business is seasonal, the off-season weeks when no work is required or available may be counted as weeks of performing services full time. The off season must be less than 6 months and you must work full time before and after the off season.

For example, you own and operate a motel at a beach resort. You are considered self-employed on a full-time basis during the weeks of the off season if the motel is closed for less than 6 months and you work as a full-time operator of the motel before and after the off season.

Joint return. If you are married and file a joint return and both you and your spouse work full time, either of you can satisfy the full-time work test. However, you cannot combine the weeks your spouse worked with the weeks you worked to satisfy that test.

Time test not yet met. You can deduct your moving expenses on your 2000 tax return even if you have not yet met the time test by the date your 2000 return is due. You can do this if you expect to meet the 39-week test in 2001, or the 78-week test in 2001 or 2002. If you deduct moving expenses but do not meet the time test by 2001 or 2002, you must either:

1. Report your moving expense deduction as other income on your Form 1040 for the year you cannot meet the test, or
2. Amend your 2000 return.

Use Form 1040X, Amended U.S. Individual Income Tax Return, to amend your return.

If you do not deduct your moving expenses on your 2000 return, and you later meet the time test, you can file an amended return for 2000 to take the deduction.

Example. You arrive in the general area of your new job on September 15, 2000. You deduct your moving expenses on your 2000 return, the year of the move, even though you have not yet met the time test by the date your return is due. If you do not meet the 39-week test by September 15, 2001, you must either:

1. Report as income on your 2001 return the amount you deducted as moving expenses on your 2000 return, or
2. Amend your 2000 return.

Exceptions to the time test. You do not have to meet the time test if one of the following applies.

1. You are in the Armed Forces and you moved because of a permanent change of station. See Members of the Armed Forces, later.
2. You moved to the United States because you retired. See Retirees or Survivors Who Move to the United States, later.
3. You are the survivor of a person whose main job location at the time of death was outside the United States. See Retirees or Survivors Who Move to the United States, later.
4. Your job at the new location ends because of death or disability.
5. You are transferred for your employer's benefit or laid off for a reason other than willful misconduct. For this exception, you must have obtained full-time employment, and you must have expected to meet the test at the time you started the job.

Figure B

Members of the Armed Forces

If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you do not have to meet the distance and time tests, discussed earlier. You can deduct your unreimbursed allowable moving expenses.

A permanent change of station includes:

1. A move from your home to the first post of active duty,
2. A move from one permanent post of duty to another, and
3. A move from your last post of duty to your home or to a nearer point in the United States. The move must occur within one year of ending your active duty or within the period allowed under the Joint Travel Regulations.

Spouse and dependents. If a member of the Armed Forces dies, is imprisoned, or deserts, a permanent change of station for the spouse or dependent includes a move to:

• The place of enlistment,
• The member's, spouse's, or dependent's home of record, or
• A nearer point in the United States.

If the military moves you and your spouse and dependents to or from separate locations, the moves are treated as a single move to your new main job location.

Services or reimbursements provided by government. Do not include in income the value of moving and storage services provided by the government because of a permanent change of station. In general, if the total reimbursements or allowances you receive from the government because of the move are more than your actual moving expenses, the government should include the excess in your wages on Form W-2. However, the excess portion of a dislocation allowance, a temporary lodging allowance, a temporary lodging expense, or a move-in housing allowance is not included in income.

If your reimbursements or allowances are less than your actual moving expenses, do not include the reimbursements or allowances in income. You can deduct the expenses that exceed your reimbursements. See Deductible Moving Expenses, later.

How to complete Form 3903 for members of the Armed Forces. Take the following steps.

1. Complete lines 1 and 2, using your actual expenses. Do not include any expenses for moving services provided by the government. Also do not include any expenses which were reimbursed by an allowance excluded from income.
2. Enter on line 4 the total reimbursements and allowances you received from the government for the expenses claimed on lines 1 and 2. Do not include the value of moving services provided by the government. Also do not include any part of a dislocation allowance, a temporary lodging allowance, a temporary lodging expense, or a move-in housing allowance.
3. Complete line 5. If line 3 is more than line 4, subtract line 4 from line 3 and enter the result on line 5 and on Form 1040, line 26. This is your moving expense deduction. If line 3 is equal to or less than line 4, enter zero on line 5 (you do not have a moving expense deduction). Subtract line 3 from line 4 and, if the result is more than zero, enter it on Form 1040, line 7.

If the military moves you and your spouse and dependents to or from different locations, treat these moves as a single move.

Do not deduct any expenses for moving services provided by the government.

Retirees or Survivors Who Move to the United States

You can deduct your allowable moving expenses if you move to the United States or to a possession of the United States. You do not have to meet the time test, discussed earlier, but you must meet the requirements discussed below.

Retirees who were working abroad. You can deduct moving expenses for a move to a new home in the United States when you permanently retire. However, both your former main job location and your former home must have been outside the United States.

Permanently retired. You are considered permanently retired when you cease gainful full-time employment or self-employment. If, at the time you retire, you intend your retirement to be permanent, you will be considered retired even though you later return to work. Your intention to retire permanently may be determined by:

1. Your age and health,
2. The customary retirement age for people who do similar work,
3. Whether you receive retirement payments from a pension or retirement fund, and
4. The length of time before you return to full-time work.

Survivors of decedents who were working abroad. You can deduct moving expenses for a move to a home in the United States if you are the spouse or the dependent of a person whose main job location at the time of death was outside the United States. The move must begin within 6 months after the decedent's death. It must be from the decedent's former home outside the United States. That home must also have been your home.

When a move begins. A move begins when one of the following events occurs.

1. You contract for your household goods and personal effects to be moved to your home in the United States, but only if the move is completed within a reasonable time.
2. Your household goods and personal effects are packed and on the way to your home in the United States.
3. You leave your former home to travel to your new home in the United States.

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