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When you are employed and move to a new location to start a new job, the IRS may allow you to deduct expenses related to your move if you meet certain conditions. This particular tax rule is of no help to people who move after retirement since they are no longer working. However, the IRS does provide some exceptions of which certain retirees can take advantage.
Retirees Moving to the United States
If you are retired and you were working abroad, and you move to the United States, you may be allowed to deduct your moving expenses provided you meet the following conditions: You must be considered permanently retired and both your former main job location and your former home must have been outside the United States.
Survivors of Decedents
You can deduct moving expenses if you are the spouse or dependent of a deceased individual whose main occupation at the time of death was located outside the United States provided the following are met: You move to a home in the United States, you initiate the move within six months of the decedent's death, the move is from the decedent's former home, the home was located outside the United States and the the home was also your home.
For the purpose of the rules applying to retirees and survivors of decedents moving to the United States, the term United States is intended to mean the entire country of the United States and all of its possessions.
Permanently retired means you cease full-time gainful employment or self-employment. If it is deemed that you intended to permanently retire, you will still be considered retired if you later return to work. The IRS determines your intention to retire permanently by a number of factors, such as: your age, your health, the usual age at which people retire who do similar work, whether you receive retirement payout from a pension plan or retirement fund, and the length of time before you return to work, which is entirely arbitrary.
If you move and die within the same calendar year, the IRS will allow your moving expense deduction on your final tax return. The person or company filing your final return must attach Form 3903 to the final return.
Armed Forces Members
You can deduct moving expenses not reimbursed by the U.S. government if you move from your last post of active duty to a home or to a nearer point in the United States. The move must occur within one year of ending your active duty.
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