2018 Form 3903 (Moving Expenses) and Instructions
The IRS has issued the 2018 version of Form 3903 (Moving Expenses), which has traditionally been used by employees to calculate and report deductible job-related moving expenses. The 2018 form and instructions have been modified to reflect that the moving expense deduction (as well as the income tax exclusion for employer-provided moving expense reimbursements) is currently available only to members of the Armed Forces on active duty who move pursuant to military orders and incident to permanent changes of station. The Tax Cuts and Jobs Act suspended the moving expense deduction under Code § 217 and the exclusion for employer-provided moving expense reimbursements under Code § 132(g) for all other taxpayers for tax years beginning after 2017 and before 2026 (see our Checkpoint article). While relatively few changes were needed to reflect that suspension in the form, more substantial changes were needed to remove from the instructions items that do not apply to servicemembers, such as the distance and time tests.
EBIA Comment: The revised Form 3903 serves as a reminder that the deduction and exclusion for employer-provided moving expense benefits have been suspended for individuals other than the specified members of the Armed Forces. The IRS has clarified, however, that employer payments or reimbursements in 2018 for expenses attributable to an employee’s move in 2017 can be excluded from income if (1) the expenses would have qualified for the moving expenses deduction had they been paid for by the employee in 2017 and (2) no deduction was actually taken by the employee (see our Checkpoint article). In addition, while the suspension affects the tax consequences for employees, it does not prohibit employers from continuing to pay for employee’s expenses, and, in most cases, those expenses should continue to be fully deductible by employers (see our Checkpoint Question of the Week). For more information, see EBIA’s Fringe Benefits manual at Section XVII.F (“Tax Treatment of Qualified and Nonqualified Moving Expense Benefits”).
Contributing Editors: EBIA Staff.