Moving on military orders: the drive you can still deduct

Since 2018 almost nobody can deduct the cost of a move. That includes a move for a new job in another state, and a law signed in July 2025 made the rule permanent. One group kept the deduction the whole time: members of the Armed Forces on active duty who move because of a permanent change of station.

If you drive to your new duty station, part of that drive can come off your income. Once the military’s reimbursement is taken out, what is left can be a few dollars of tolls, a few hundred dollars, or nothing at all. This piece is about working out which.

Who can deduct

The rule is in section 217(g) of the tax code, and Form 3903 repeats it above its first line: you can deduct moving expenses only if you are “a Member of the Armed Forces on active duty and, due to a military order, you, your spouse, or your dependents move because of a permanent change of station.” The form has a box you tick to certify that you meet it.

For tax purposes the Armed Forces are the Army, Navy, Marine Corps, Air Force, Space Force and Coast Guard, reserve components included. The Merchant Marine is not.

A permanent change of station includes three moves:

• from your home to your first post of duty, when you are appointed, reappointed, reinstated or inducted;
• from one permanent post of duty to another;
• from your last post of duty to your home, or to a nearer point in the United States. This one has to happen within one year of ending active duty, or within the period the Joint Travel Regulations allow.

Your family counts. The deduction covers moving you and the members of your household: anyone whose main home was both the old home and the new one. If the military moves your spouse and children to or from a different place than you, it is still treated as one move. If a member deserts, is imprisoned or dies, a move by the spouse or dependents to the place of enlistment, the home of record, or a nearer point in the United States counts as a permanent change of station for them.

Reserve and National Guard. Reservists and Guard members are part of the Armed Forces, but the rule asks for both active duty and a PCS order. A drilling reservist, or a Guard member on state orders, cannot deduct a move. A reservist or Guard member on federal active duty who moves under PCS orders meets the words of the rule; if that is you, the orders are what decide it. Reserve travel more than 100 miles from home is a different deduction, on Form 2106 and Schedule 1, line 12, not this one.

The intelligence community, from 2026. The 2025 law extended the deduction to employees and new appointees of the intelligence community (the CIA, the NSA and the other elements listed in 50 U.S.C. 3003) who relocate for a change in assignment, for tax years beginning after December 31, 2025. The 2026 draft of Form 3903 already names them.

Everyone else cannot. The deduction was suspended for tax years 2018 through 2025, and the 2025 law removed the end date, so the suspension is now permanent. That covers civilians moving for a job, and a military spouse moving for their own job rather than on the member’s orders. TDY and deployments are not a permanent change of station either.

What counts for the car

Line 2 of Form 3903 is travel from the old home to the new one, for you and your household. The instructions say it includes “car expenses and airfare”, and the form adds lodging on the way. The costs of the day you arrive are included.

One trip per person. The instructions say members of the household “do not have to travel together or at the same time. But you can only include expenses for one trip per person.” If you drive one car and your spouse drives the other, both cars’ miles count. A drive that takes four days, and shows up in a log as a dozen separate drives, is still one trip.

Two ways to price the car, and you use one of them:

• the standard mileage rate for moving, on the miles you drove; or
• what you actually paid for gas and oil, if you kept a record of each expense.

With either one, you add parking fees and tolls. The moving rate depends on the date you drove:

Miles driven	Moving rate
In 2025	21¢ a mile
January 1 – June 30, 2026	20.5¢ a mile
From July 1, 2026	23.5¢ a mile

The IRS raised the 2026 rate in the middle of the year because of fuel prices. Notice 2026-10 set 20.5¢, and Announcement 2026-11 set 23.5¢ for moving expenses paid or incurred on or after July 1, 2026.

So a trip that crosses that date is priced at both rates. Say you leave on June 29, 2026, drive 700 miles by the end of June 30, and 700 more from July 1. That is $143.50 at 20.5¢ plus $164.50 at 23.5¢: $308 for the car. With $22 of tolls, $330 goes on line 2, and lodging on the way is added to it.

What does not count:

• meals. Line 2 says so on the form itself;
• house-hunting trips;
• trips back to your old home;
• side trips you did not need to make, and “lavish and extravagant” lodging;
• repairs, maintenance, insurance or depreciation for the car, car tags, and a driver’s license;
• drives around the new area after you arrive. Line 2 is the journey from the old home to the new one, not the week of settling in.

Moving your household goods (packing, crating, hauling a trailer, storage in transit for up to 30 days in a row) is a separate line, line 1.

Reimbursements: MALT and the allowances

The deduction is what you spent and were not paid back. Form 3903 adds your costs on line 3, then takes off on line 4 “the total amount the government paid you for the expenses listed on lines 1 and 2 that is not included in box 1 of your Form W-2 (wages).” The form says that amount should be shown in box 12 of your W-2 with code P, but the law does not require the military to report it there (section 217(g)(2)), so box 12 may be empty. If it is, take what you were paid from your travel voucher settlement. Do not enter zero just because box 12 is blank.

MALT. For the drive, the payment is usually MALT, the Monetary Allowance in Lieu of Transportation. It is mileage pay for a PCS, paid per mile on the official distance of each part of the travel, for up to two cars, and not on the miles you actually drove. The settlement of your travel voucher is your record of what it paid.

Where MALT paid at least the IRS moving rate for the official miles, it cancels the mileage for them. Line 4 is one total, taken off lines 1 and 2 together, so anything MALT paid above what your car is worth comes off the rest as well. What can still be left over:

• miles you actually drove beyond the official distance, on a reasonable route (not side trips);
• a car that got no MALT;
• parking and tolls your voucher did not pay back;
• lodging on the way that your per diem did not cover.

DLA and the lodging allowances work differently. The dislocation allowance, temporary lodging expense, temporary lodging allowance and move-in housing allowance are not taxed, and they do not go on line 4. But the instructions say not to deduct any expense that one of those allowances paid for, so a cost they covered stays off the form altogether.

If you were paid as much as it cost, or more, there is no deduction. When line 3 is less than line 4, the form tells you to include the difference on Form 1040, line 1h.

Where it goes on the return

• Form 3903, line 2: the car (miles at the moving rate, or gas and oil), plus parking, tolls and lodging on the way.
• Line 4: what the government paid you for lines 1 and 2 that is not in your W-2 wages.
• Line 5: line 3 minus line 4, carried to Schedule 1 (Form 1040), line 14.

Line 14 is in Part II of Schedule 1, Adjustments to Income. The deduction lowers your adjusted gross income, so you get it whether you itemize or take the standard deduction. It is not part of Schedule A or Schedule C. You claim it for the year you paid or incurred the costs, and if two moves in the same year both qualify, you fill in a separate Form 3903 for each move.

What to keep

Form 3903 asks for totals, not receipts. These are what back the totals up if the IRS asks:

In odo

odo never files a drive as Moving on its own, because it cannot know your orders, and a frequent-drive rule cannot file one either. You choose it:

• When a drive comes up to be sorted in the app, tap Other deduction and pick Moving. It is marked Military only, and the report’s note on it speaks of PCS orders: odo sets Moving up for a military move, not an intelligence-community relocation.
• A drive you already sorted can be changed: on the phone from the drive’s page, under More, and on the web from Trips.

File each leg of the journey from the old home to the new one, on every day of the trip, and nothing else: not the house-hunting trip, not the drives around the new base.

odo prices a Moving drive at the IRS moving rate for the drive’s date, so a trip that crosses July 1, 2026 is priced at both rates, and adds the parking and tolls you entered on it. The report shows the result:

• a row under Deduction by form, Form 3903 → Schedule 1, line 14, with the miles and the amount;
• a Military move · Form 3903 section with the total of the moving drives: how many, the miles, parking, tolls and value (each drive is also in the trip log, marked Moving);
• a note that the amount counts only for a military move under PCS orders, less what the military reimbursed.

The amount is part of the report’s headline deduction, next to Schedule C and Schedule A. It is the full figure for the car, before any reimbursement: odo does not know what MALT or per diem paid you, so it does not take it off. You enter that yourself on line 4. Lodging on the way is not in odo’s figure either; add it to line 2 from your receipts. If you use actual gas and oil instead of the rate, take the car’s cost from your receipts and use odo’s log for the dates and miles.

The bottom line

If you moved under PCS orders while on active duty, the drive to your new home is deductible: the miles at the moving rate for their date, or gas and oil, plus parking, tolls and lodging on the way. Take off what the military paid for it. What is left, if anything, goes on Schedule 1, line 14, whether or not you itemize. For almost everyone else, a move is not deductible at all.

Sources

• IRS, Form 3903 and the Instructions for Form 3903 (2025): who qualifies, line 2 Travel, line 4, line 5; and the 2026 draft instructions, which add the intelligence community and the two 2026 rates.
• IRS, Publication 3: Armed Forces’ Tax Guide (2025): Moving Expenses and Travel Expenses of Armed Forces Reservists.
• IRS, Notice 2026-10 (the 2026 standard mileage rates) and Announcement 2026-11, I.R.B. 2026-29 (the rates from July 1, 2026).
• IRS, Schedule 1 (Form 1040): Part II, Adjustments to Income, line 14.
• 26 U.S. Code § 217: subsection (g) for the Armed Forces, including (g)(2), under which the military does not have to report what it pays for a move, and (k) for the suspension and the intelligence community; Public Law 119-21, section 70113, which made the suspension permanent.
• Military OneSource, Monetary Allowance in Lieu of Transportation.

This article is general information, not tax advice. Tax situations vary — check with a qualified professional before you file.