Life Change Checklist: I Moved Out of State

January 07, 2016 : Kevin Martin

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Moving can be exciting or stressful in any circumstance, but moving to a whole new state can really amplify those emotions.

In addition to finding a new place to live, setting up mail forwarding, establishing new utilities, changing your address on EVERY LITTLE THING and, you know, actually doing the packing and moving and unloading, there are tax issues to think about too.

First, you should know that there are a lot of unique state tax issues you might encounter. But they will vary depending on which state you move from and which state you move to. Some states have income tax. Some don’t. Some states have different rules for part-time residents (when you didn’t live there all year). You should consult with one of our tax professionals to go over all of these unique circumstances.

Here, we will cover some general tax considerations, or tax benefits, that would apply no matter which state you live in.

1. Keep all your receipts for moving expenses

I know, this is easier said than done when your whole life is in flux. However, you will need this documentation if you qualify to deduct moving expenses. (Click on that link to get the full description, but basically you need to move far enough away, move for work, not have expenses reimbursed and work in that new location for a long enough period of time.) You should keep any receipt for expenses related to:

  • packing and shipping
  • travel (like hotels, airline tickets, fuel and road tolls)
  • utility connection or disconnect fees

2. Find out if employer-reimbursed moving expenses are included on your W-2

If your employer pays for your relocation, you’ll need to do some research. If the reimbursement is not included in wages on your W-2, you can’t deduct anything. If it is included on in your wages on your W-2, you may still be able to deduct expenses like those listed above for packing, shipping, transportation and utility fees.

3. If you have health insurance through a Marketplace, notify them of the move

Moving is a life change, and you are required to notify the Marketplace of it. It’s important to do this because a life change can affect your eligibility for benefits. It may also give you the option to change your health insurance plan, under a special enrollment period, because of your move. This change could also affect the amount of your Advance Premium Tax Credit.

4. Account for any real estate left behind

Are you renting out your old place? Making any money on a sublease? Or maybe you sold it altogether? There are different tax rules related to each scenario. It’s important to keep all documentation related to the activity, and it’s advisable to talk with a tax professional for help making sure you claim the income, and any related deductions, correctly.

Finally, if you are the spouse of a military member and your move was required because of their service, your tax issues may be completely different. Read more about the Military Spouse Residency Relief Act.

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Kevin Martin

Kevin Martin

The Tax Institute, H&R Block

Kevin Martin, JD, LLM, is a lead tax research analyst at The Tax Institute. Kevin leads research teams focused on estate, trust, gift, retirement, IRS procedures and state and local tax issues.