What is Form 3903
Form 3903 is a tax form created by the Internal Revenue Service (IRS) and used by taxpayers to deduct moving expenses related to a new job.
BREAKING DOWN Form 3903
Form 3903 is used for each individual qualifying move a taxpayer makes in a tax year, which means those with multiple job-related moves must fill out multiple forms. A taxpayer may also use this form to deduct other reasonable moving expenses, such as the cost of hiring professional movers or expenses related to traveling to their new home.
A qualifying time and distance test must be completed to determine if the costs of a move can be deducted. A taxpayer’s new employment location must be at least 50 miles further than the distance between their home and their old employer. There is also a 39-week seasoning period. This means the taxpayer must be employed at the new location for at least 39 weeks out of the year. There are valid reasons for exceptions to the seasoning requirement, including but not limited to disability, transfer or termination of employment.
There are no qualifying distance or time requirements for members of the armed forces who utilize the deductions.
To determine if a taxpayer’s moving expenses qualify for deduction, visit the Internal Revenue Service (IRS) website or consult with an experienced tax professional.
An Example of Form 3903
Imagine Brian Jones recently switched jobs. He had previously been working in the social media department of the failing BUG Pest Control Company in New Jersey. When he found a similar position with a growing company called Swatter Pest Solutions in Vermont, he was eager to make the move. Since the new position would increase his commute from his existing home to BUG by greater than 50 miles, he more than qualified for the distance requirement. The duration of the length of his employment with both companies more than met his seasoning requirement. Brian was then able to take a deduction for all his qualifying moving expenses. This included the professional packers and movers he hired to take his family’s belongings from their old home to their new home. It also included the hotel that they stayed over night at in New York during their move. Brian also deducted fees for the agent he hired to help him find a new home in Vermont.
If Brian had instead taken the job he was considering with Environmental Pest in Pennsylvania, just ten minutes and 15 miles from both his current job and his current home, he would not have been able to deduct any of his moving expenses since he would fail to meet the distance requirement.