Civilian Moving Expenses Tax Deduction

Defense Finance
and Accounting Service
Providing payment services of the U.S. Department of Defense
MyPay

Civilian Relocation PCS Tax Changes 

The Tax Cuts and Jobs Act of 2017 made most civilian permanent change of station entitlements taxable. 

The TCJA does not affect travel allowances received prior to Jan. 1, 2018. To learn more about the background behind this change, click here.   

How the TCJA will affect you depends on when your PCS orders were issued. Select from the two categories below to see specific information for your situation and get the most updated information.

Button for PCS orders issued in 2018 Button for PCS orders issued after 2018Button for civilian relocation tax changes frequently asked questions   

 

Important 

2018 Travel W-2’s did not report the following taxable entitlements if they were paid to a third party vendor. Third party payments are payments paid to vendors for taxable moving expenses and counted as income to the traveler. They include:

          - HHG shipment                                           - CONUS Non-temporary storage
          - POV shipment (CONUS)                           - Mobile Home Shipment

For 2018 travelers, if a payment was made to a third party vendor from January - October 2018, a W-2C will be issued. W-2Cs will be released prior to the end of 2019.

  • If you receive a W-2C from DFAS, you will owe a tax debt to DFAS.
  • Your tax debt will be for Social Security (6.2%) and Medicare (1.45%) taxes only.
  • Federal income taxes will be settled with the IRS on your amended return. 
  • After you have filed your amended tax return, you may file a Relocation Income Tax Allowance (RITA) claim. 

Payments made to third party vendors in November and December 2018 will be reported as regular income on the Travel 2019 W-2. (Per IRS Publication 15-B)

Taxable Entitlements 

The following is a list of all taxable PCS entitlements. These pages link to additional information about each entitlement.

A graphic showing the tax rates for civilian PCS taxable entitlements.

State and local taxes are not withheld, so you should consult with your local tax advisor to determine if your PCS wages are taxable under your current state and local government laws and regulations.

Get Help with the Costs of Taxable Entitlements

Button for Relocation Income Tax AllowanceButton for Witholding Tax Allowance

Need to talk to someone? Please contact the Customer Care Center at 1-888-332-7366, options 1 then 1, or contact us by email at DFAS-CIVREL-Questionsonly@mail.mil for any additional questions.

For employees located overseas, you may contact the Customer Care Center via DSN 312-699-8030 or 312-699-0300 between the hours of 7:30 a.m. and 5 p.m. EST.

Please note, the information on these pages is intended for DFAS Travel Pay customers. If you are not sure if this includes you, click here for a listing of DFAS civilian PCS travel customers.

Page updated September 10, 2019