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Level 2

STATE TAXES deducting moving reimbursement?

I understand under the new Tax Cuts Job Act, moving expense are not tax deductible at the federal level, but how does it work at the state level for CA and MA?

I heard CA and MA were nonconforming and am wondering if I can get a deduction for my moving expenses this year when I moved from MA to CA in 2018.

My employer paid the moving company and tax on the moving expenses directly to the moving company and tax authorities (total $11k), but then $11k shows up in my Box 1 wages. Therefore, I presume I am being taxed on the moving expense reimbursement since it is being treated as "income".

If this is the case, do I report on TT that there was $11k of moving expenses?

1 Reply
New Member

STATE TAXES deducting moving reimbursement?

You are correct about both of those states. It is being taxed as income. However if it actually cost more than the reimbursement, it might help your state taxes.

You will enter the information in the federal form, even though it won't count on federal. That information will flow to the states. The state interview might ask some questions about moving expenses or reimbursement. You should apply moving expenses to the state you moved to.

Here's how:

  • Federal
  • Deductions & Credits
  • Other Deductions & Credits
  • Moving Expenses