One of the most common money questions I hear from people relocating to Greater Lafayette is whether they can write off the cost of the move. It makes sense to ask. A long-distance move is expensive, and for many years a lot of people could deduct part of it.

I'll be straight with you up front. I am a real estate agent, not a tax advisor. What follows is a plain-language overview of what the IRS publishes, so you know which questions to bring to a tax professional. Please confirm anything here with one before you file.

The short answer for most people

For most people relocating for a job, moving expenses are not federally tax deductible under current law. The deduction is limited to members of the Armed Forces on active duty who move because of a permanent change of station under military orders. Starting with tax years after 2025, the IRS also lists certain intelligence community employees who relocate because of a change in assignment. You can read the IRS description of who uses the form at About Form 3903, Moving Expenses on irs.gov.

If you are a civilian moving for a new job at Purdue, a hospital, a manufacturer, or anywhere else, that usually means the cost of the move comes out of your own pocket or your employer's, not off your tax bill.

What changed, in plain words

Many people remember a time when moving for work came with a deduction if you met certain distance and time tests. That changed starting with the 2018 tax year, when the deduction was suspended for most nonmilitary taxpayers.

The suspension was originally set to expire. More recent federal law made it permanent instead, and kept the exception for active-duty military, while adding certain intelligence community employees. The IRS explains the current treatment in Publication 15-B, its guide to fringe benefits for employers. If a friend, a relative, or an old blog post tells you that you can deduct your move, check the date. The rules they remember may no longer apply.

Employer relocation money is generally taxable

This is the part that surprises people the most. If your employer reimburses your moving costs or pays you a relocation allowance, that money is generally treated as taxable wages for nonmilitary employees. It may show up on your paycheck or your year-end tax form, with taxes withheld. The IRS covers this in Publication 15-B, which explains that the exclusion for qualified moving expense reimbursements is no longer available to most employees.

Some employers add extra money to help cover the tax on a relocation benefit. You will often hear this called a gross-up. Others do not. Before you sign an offer, ask your employer or their relocation company exactly how your package is taxed and whether a gross-up is included. I covered the broader picture in what relocation packages typically cover.

If you are active-duty military

If you are moving to the area on permanent change of station orders, you may be able to deduct unreimbursed moving costs, and some military moving benefits are handled differently from civilian reimbursements. The IRS uses Form 3903 for this deduction. Your base finance office and a tax professional familiar with military returns are the right people to walk you through it.

For the housing side of a military move, including VA loans and buying on a tight report date, see a military PCS move to Greater Lafayette.

What this means for your moving budget

Since most civilian moves will not come with a federal deduction, plan your budget as if every dollar of the move is real, after-tax money. That one shift in thinking prevents a lot of surprises.

  • Get moving estimates early. Long-distance moves are priced largely on weight and distance, and estimates vary.
  • Know your relocation package. Write down what your employer covers, what is a lump sum, and whether taxes are grossed up.
  • Plan for the in-between. Temporary housing, storage, and travel for house hunting add up fast.
  • Do not forget the home side. Closing costs on your purchase and selling costs on your old home are separate from moving costs.

I put together a full walkthrough in budgeting the true cost of your move to Lafayette.

Other tax questions that come up during a move

A relocation often touches several parts of your taxes at once. These are questions to raise with a tax professional, not answers.

Selling your old home. Many homeowners can exclude some or all of the gain on the sale of a primary residence if they meet ownership and use tests. Ask how it applies to you, especially if you lived in the home a short time. I wrote a plain-language overview in capital gains when selling a home.

Owning a home here. Mortgage interest and property taxes may be deductible if you itemize, but many households take the standard deduction instead. Your tax professional can tell you which makes sense.

Moving between states. If you move partway through the year, you may file part-year returns in two states. Indiana also has county income taxes. A tax professional can sort out which state taxes which income.

Keep your receipts anyway

Even if you cannot deduct a single moving cost, keep everything. Moving estimates, truck rentals, temporary housing, travel, and storage. Your employer may need them for reimbursement, your tax professional may want them, and they help you see where the money went.

A simple folder, paper or digital, started on the day you accept the job saves a lot of hunting later. The people who feel calm gave themselves a runway, and a little paperwork discipline is part of that runway.

Questions to bring to your tax professional

If you only remember one part of this article, make it this list. Bring it to your first conversation with a tax professional, ideally before you accept a relocation package.

  • Does anything about my situation qualify for a moving expense deduction?
  • How will my employer's relocation payments be taxed, and should I ask for a gross-up?
  • Do I need to adjust my withholding for the year of the move?
  • How will part-year residency in two states affect my returns?
  • If I sell my old home, how do the gain exclusion rules apply to me?
  • Which records should I keep from the move and the home purchase?

A short meeting before you sign an offer is far easier than untangling a surprise the following spring.

Why local knowledge still matters

Tax rules come from Washington. Home prices, timing, and which homes fit your budget come from right here. You can find listings anywhere, but you cannot Google which homes are priced above what the market will bear or what is about to come to market next week.

That local knowledge, not access to listings, is what actually protects your budget once the moving costs are settled. I will not give you tax advice, but I will help you spend your housing dollars wisely.

If you are planning a move and want help building a realistic budget on the housing side, grab a time on my calendar. Bring your tax questions to a professional, and bring your house questions to me. No pressure either way. A real person reads every message.