Relocation across states expenses related questions

[shiyi11]

In federal level, federal tax regulations that became effective January 1, 2018 after the passage of the Tax Cut and Jobs Act (TCJA).  moving expense are not deductible in 1040 anymore.

Moving from Ohio to Mass in mid 2021

• I can claim the moving expense deduction (if not reimbursed) in Mass state tax return

Moving from Mass to CA in late 2022

• I can claim the moving expense deduction (if not reimbursed) in CA state tax return

1. On January 25, 2023 Massachusetts published notice that the moving expense deduction allowed for by state tax statute for tax years 2021 and prior, would not be allowed for tax years 2022 and beyond.

2. Qualified moving expense reimbursements will remain nontaxable for California state tax, and taxable for federal tax, for tax years 2018-2025, or until state or federal law changes.

Please let me know if my above understanding is correct.

And is it general true that if moving from State A to State B for new job. One can only claim moving expense deduction on the destination State B tax return, but not State A.

[shiyi11]

I found some relevant information.

Meaning Moving out of CA, none of the expenses would be deductible (typically)

Section C – Adjustments to Income

Line 14 – Moving Expenses

California law and federal law are no longer the same for moving expenses. If you moved:

• Into California in connection with your new job, enter the amount from line 14, column D, on line 14, column E.
• Out of California in connection with your new job, enter -0- on line 14, column E.

If you moved out of California in connection with your new job and received compensation from that job attributable to a California source, your moving expense adjustment will be limited by the ratio of California source compensation from the new job to total compensation from the new job.

[HollyP]

For your move to Mass in 2021. Yes, as a part year resident of Massachusetts you may be eligible for the state deduction. If you moved due to a change in your job or business location or because you started a new job or business, you can deduct reasonable unreimbursed moving expenses if you meet all of the following requirements: 

• Your move was closely related to the start of work;
• You meet a distance test; and
• You meet a time test.

In 2021, a deduction for moving expenses, related to Massachusetts employment, continued to be allowed if the above requirements are met as Massachusetts followed IRC § 217 in effect as of January 1, 2005. See TIR 18-14 for more information. See also, Page 25-26, Line 5. Moving Expenses.

For your move to California in 2022. Yes, if you are not a military member, and if you move to a new home because of a new principal workplace, you may be able to deduct your moving expenses whether you are self-employed or an employee. But you must meet both the distance and time tests that follow prior to completing line 1 through line 5 of form FTB 3913. Also, your move must be closely related both in time and place to the start of work at your new job location. See 2022 Instructions for Form FTB 3913, Section B. Who Can Deduct Moving Expenses for more info. 

For the state where you claim moving expense. Yes, in your example the moving expenses are always deducted state B, the state you moved to for the new workplace.