How Does Moving Affect Taxes?

Federal moving expense deductions were eliminated in 2018 for most people — only active-duty military members moving under orders can still deduct them. If your employer reimburses moving expenses, that reimbursement is generally taxable income to you. Moving to a new state mid-year may require filing returns in both states. Establishing domicile in a new (lower-tax) state requires more than just moving — you need to genuinely sever ties with the old state. Keep records of your move date and new address for state tax purposes.