Moving Expenses Still Deductible in 11 States

11.28.18 |When the Tax Cuts and Jobs Act (TCJA) took effect in January, moving expenses were no longer deductible – except for military moves. Nearly a year later, 11 states are not conforming to the TCJA due to their own legislative action or by default. As of this publication, the following states are expected to allow exclusions/deductions for moving expenses in 2018. Here’s the breakdown: Five states have passed legislation to make moving expenses deductible or excludable.

• Arizona

• Hawaii

• Iowa

• New York

• Virginia

Six states have not passed any legislation and automatically conform to pre-TCJA tax law, which allows moving expenses to be deductible or excludable. These states will have to pass legislation to conform to the TCJA.

• Arkansas

• California

• Massachusetts

• Minnesota

• New Jersey

• Pennsylvania

Kentucky had passed legislation to follow pre-2018 federal tax laws but recently clarified its laws and determined that moving expenses would be taxable.

The remaining states have conformed to the TCJA either automatically or via new legislation. Between now and year-end, additional changes are possible.

Our Advice: Ensure moving-related reimbursements are properly managed based on each employee’s state of tax filing. Reach out to the person or entity managing your gross-up calculations to assess your situation, adjust as needed, and proactively manage potential issues.

Questions? Contact our experts