Form 3903 for 2026: Moving Deduction for Military and Intelligence

For most of the last decade, Form 3903 has been a form almost nobody could use. The Tax Cuts and Jobs Act suspended the moving expense deduction for 2018 through 2025, with an exception for active-duty service members who moved under a military order because of a permanent change of station. A civilian who took a job two states away got nothing, and the form stayed in the IRS catalog for the service member on orders. In 2026 it stays alive and gets a second audience. Section 70113 of Public Law 119-21 removed the 2025 end date and added the intelligence community.

This guide covers who qualifies, the two mileage rates, what changed and what did not, and how lines 3, 4 and 5 fit together, with a move that straddles June 30. It relies on the final 2026 Form 3903 and its instructions, which the IRS has now posted, and on the 2026 draft of Schedule 1, which was not yet final on November 11, 2026.

Who can deduct moving expenses in 2026

The top of the 2026 form states the test in one sentence. You can deduct moving expenses only if you are a member of the Armed Forces on active duty and, due to a military order, you, your spouse or your dependents move because of a permanent change of station, or you are a member of the intelligence community who moves due to a change in assignment that requires relocation.

The statute behind that sentence is Section 70113 of Public Law 119-21. It struck the words “and before January 1, 2026” from Section 217(k), so the limit that confines the deduction to the military no longer expires. It then added a new paragraph treating “an employee or new appointee of the intelligence community” (other than a member of the Armed Forces) who “moves pursuant to a change in assignment which requires relocation” the same way as a service member on a permanent change of station.

A permanent change of station, according to the instructions, includes three kinds of move:

• a move from your home to your first post of duty when appointed, reappointed, reinstated or inducted;
• a move from one permanent post of duty to another permanent post of duty;
• a move from your last post of duty to your home or to a nearer point in the United States, which must occur within 1 year of ending your active duty or within the period allowed under the Joint Travel Regulations.

The intelligence community list, word for word

This is where the details decide the outcome. The 2026 instructions define a member of the intelligence community as “an employee or new appointee of the intelligence community (as defined in section 3 of the National Security Act of 1947 (50 U.S.C. 3003) (excluding a member of the Armed Forces)).” They then list what the intelligence community means:

• The Office of the Director of National Intelligence.
• The Central Intelligence Agency.
• The National Security Agency.
• The Defense Intelligence Agency.
• The National Geospatial-Intelligence Agency.
• The National Reconnaissance Office.
• “Other offices within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs.”
• “The intelligence elements of the Army, the Navy, the Air Force, the Marine Corps, the Space Force, the Coast Guard, the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Department of Energy.”
• The Bureau of Intelligence and Research of the Department of State.
• The Office of Intelligence and Analysis of the Department of the Treasury.
• The Office of Intelligence and Analysis of the Department of Homeland Security.
• “Such other elements of any department or agency as may be designated by the President or designated jointly by the Director of National Intelligence and the head of the department or agency concerned as an element of the intelligence community.”

Read the eighth bullet slowly. It does not say the FBI, the DEA or the Department of Energy. It says “the intelligence elements of” them. Read literally, the definition takes in those agencies’ intelligence elements, not the agencies as a whole, so working for the FBI, the DEA or the Department of Energy is not enough on its own. The instructions do not explain how to draw that line for a particular job, so if you work for a department that houses an intelligence element, ask your human resources office which side of the line your position is on before you count on the deduction.

What changed for 2026, and what did not

Set side by side with the 2025 edition, the 2026 Form 3903 changes in one place. The rest of the news sits in the instructions and on Schedule 1.

The eligibility sentence. The 2025 form’s “Before you begin” line stopped at the permanent change of station. The 2026 form adds “or you are a Member of the Intelligence Community who moves due to a change in assignment that requires relocation.” Lines 1 through 5 read the same as in 2025.

Two mileage rates. The 2025 instructions gave a single rate of 21 cents a mile. The 2026 instructions say that “for 2026, the standard mileage rate for using your vehicle to move to a new home is 20.5 cents a mile (23.5 cents a mile after June 30, 2026).” The same pair appears again under the general rules and under the line 2 instructions. The second number comes from Announcement 2026-11, which cited “recent increases in the price of fuel” and raised the medical and moving rate to 23.5 cents and the business rate to 76 cents for expenses paid or incurred on or after July 1, 2026. Our guide to the Schedule C mileage rates covers the business side of that change.

Schedule 1, line 14. The 2026 draft of Schedule 1 relabels the line where the deduction lands as “Moving expenses for members of the Armed Forces and the intelligence community.” On the 2025 schedule it read “Moving expenses for members of the Armed Forces.”

Not new: the checkbox and code P. The certification line, “Check here to certify that you meet these requirements. See the instructions,” was already on the 2025 form, and the 2026 instructions keep it under Reminders rather than What’s New. The Specific Instructions repeat it as a caution: “Check the box to certify that you meet the requirements to claim moving expenses.” Line 4’s reference to code P in box 12 of the W-2 is also unchanged from 2025.

For the rest of the 2026 revisions, see our overview of the IRS form drafts.

What counts as a moving expense

According to the instructions, you can deduct unreimbursed expenses for moving household goods and personal effects, and for travel.

• Line 1, household goods. For a move within or to the United States or its territories, what you paid to pack, crate and move your household goods and personal effects, including hauling a trailer, in-transit storage and insurance. You can include storing and insuring them for any period of 30 consecutive days after they leave your old home and before they are delivered to the new one. For a move outside the United States or its territories, the instructions also let you include storage for all or part of the time the new workplace continues to be your principal workplace.
• Line 2, travel. What you paid to travel from your old home to your new home, including lodging on the way and the day you arrive, but not meals. You can only include one trip per person, and household members don’t have to travel together. If you drive, you can use actual out-of-pocket expenses for gas and oil, with a record of each expense, or the standard mileage rate. Parking fees and tolls can be added to either. You can’t deduct general repairs, maintenance, insurance or depreciation on the car.

Lines 3, 4 and 5, and the code P connection

Line 3 adds lines 1 and 2. Line 4 is where the government’s payments come in: “Enter the total amount the government paid you for the expenses listed on lines 1 and 2 that is not included in box 1 of your Form W-2 (wages). This amount should be shown in box 12 of your Form W-2 with code P.”

Our list of W-2 box 12 codes covers code P alongside the rest. The instructions add what to keep off line 4: the value of moving or storage services provided by the government, and any dislocation allowance, temporary lodging allowance, temporary lodging expense or move-in housing allowance. Those are not income to begin with. The instructions say not to include in income “the value of moving and storage services provided by the government because of a permanent change of station,” or amounts received as one of those four allowances.

The exclusion that keeps those reimbursements out of income sits in Section 132(g) of the tax code. Subsections (c) and (d) of Section 70113 made its limit permanent and extended it to an intelligence community employee or new appointee “who moves pursuant to a change in assignment that requires relocation.” The reimbursement exclusion and the deduction now reach the same two groups.

Line 5 resolves it. If line 3 is more than line 4, subtract line 4 from line 3 and enter the result on line 5 and on Schedule 1 (Form 1040), line 14. That is your moving expense deduction. Line 14 sits in Part II of Schedule 1, “Adjustments to Income,” and the total of that part flows to Form 1040, line 10, which is subtracted from total income to reach adjusted gross income. If line 3 is equal to or less than line 4, you have no deduction. Subtract line 3 from line 4 and, if the result is more than zero, enter it on Form 1040, 1040-SR or 1040-NR, line 1h, which the 2026 draft of Form 1040 labels “Other earned income.” The instructions add that if reimbursements or allowances, other than the four allowances above, exceed the cost of moving and the excess isn’t included in your W-2 wages, the excess still has to be included in gross income.

A worked example that crosses June 30

The Form 3903 instructions don’t say how to split a single trip that starts before July 1 and ends after it. Announcement 2026-11 draws the line by date: the higher rates apply to expenses “paid or incurred for business, medical, or moving expense purposes on or after July 1, 2026,” and the Notice 2026-10 rates still apply to expenses before that date. To keep the arithmetic clean, this example avoids a trip that straddles the date. A staff sergeant has orders for a permanent change of station. Her spouse drives the first vehicle 2,800 miles and finishes on June 30. She drives the second vehicle another 2,800 miles, starting on July 1. These figures are invented for illustration, and I computed them in Python.

Suppose the government paid her $2,100 for those expenses, not included in box 1 of her W-2, and box 12 shows $2,100 with code P. Line 4 is $2,100, line 3 is more than line 4, and line 5 is $3,758 − $2,100 = $1,658. That goes on Schedule 1, line 14. For illustration only, a filer whose marginal federal rate is 22 percent would save about $365, which is $1,658 × 0.22 = $364.76.

Now the opposite case. If the government had paid $4,000 for those expenses, none of it included in box 1, line 3 would be less than line 4, there would be no deduction, and the difference of $4,000 − $3,758 = $242 would go on Form 1040, line 1h.

The two-rate split matters in dollars. Using 20.5 cents on all 5,600 miles would give $1,148, and 23.5 cents on all of them would give $1,316. The correct mixed figure is $1,232, so either single rate would be off by $84.

Before you file

Keep dated mileage logs and receipts for tolls, parking, lodging and packing. Announcement 2026-11 sets the rate by the date an expense is paid or incurred, so the dates matter. Compare the code P amount in box 12 with what the government told you it paid. File one Form 3903 per move, and check the box that certifies you meet the requirements. One piece is still a draft: the new label on Schedule 1, line 14, comes from the 2026 draft of that schedule.

Sources

• Internal Revenue Service, Form 3903 (2026), “Created 9/17/26”: eligibility sentence, certification checkbox, lines 1 through 5
• Internal Revenue Service, Instructions for Form 3903 (2026), dated September 28, 2026: What’s New, Reminders, Purpose of Form, definition of intelligence community, mileage rates, Specific Instructions for lines 1, 2, 4 and 5. The early release drafts (form, “Created 4/13/26”; instructions, dated August 27, 2026) carry the same wording on every point cited here
• Internal Revenue Service, Form 3903 (2025) and Instructions for Form 3903 (2025): prior-year eligibility sentence, checkbox and 21-cent rate
• Internal Revenue Service, Draft Schedule 1 (Form 1040) 2026, “Created 4/24/26”: Part II, line 14; Draft Form 1040 (2026), “Created 8/19/26”: lines 1h and 10
• Internal Revenue Service, Internal Revenue Bulletin 2026-29, Announcement 2026-11 (revised mileage rates from July 1, 2026), and Notice 2026-10 (20.5 cents for medical and moving in 2026)
• Public Law 119-21, section 70113, “Extension and Modification of Limitation on Deduction and Exclusion for Moving Expenses,” amending 26 U.S.C. 217(k) and 132(g)(2)