Civilian Moving Expenses Tax Deduction

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Civilian Relocation PCS Tax Changes 

The Tax Cuts and Jobs Act of 2017 made most civilian permanent change of station entitlements taxable. A Travel W-2 is issued in January following the year that reimbursements were paid/taxes withheld.

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 one of the three categories below to see specific information for your situation.

Button for PCS orders issued before 2018Button for PCS orders issued in 2018

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

Important 

DFAS recommends that 2018 travelers file income tax returns by the IRS filing deadlines.

2018 Travel W-2’s will not report the following taxable entitlements if they were paid to a vendor.

          - HHG shipment                                           - Mobile home shipment
          - POV shipment (CONUS)                            - Non-temporary storage (Isolated CONUS PDS only)

Corrected W-2s will be issued at a later date to report the taxable moving expense paid to the vendor. However, there is currently no anticipated timeframe for completion of the system change needed to account for these taxable moving expenses and issuing the corrected W-2s. 

Travelers receiving a corrected W-2 will need to file an amended income tax return. There may also be an additional debt owed to DFAS for tax withholdings. Travelers can file a supplemental RITA claim to alleviate that additional tax burden.

W-2 Box 12

The dollar amount recorded in Box 12, code P on Travel Pay W-2s represents non-taxable civilian PCS reimbursements. This amount is neither taxable income nor an allowed deduction in 2018 and does not impact tax liability. The non-taxable PCS reimbursements are listed in Box 12 for informational purposes only. Corrected W-2s removing this information from Box 12 are not required. The amount listed in Box 12 code P of travel W-2 is not required to be reported to the IRS on a tax return or input into tax filing software.

Check here for the IRS link clarifying the update.

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 March 26, 2019