When to Claim the Deduction

Armed Forces members who use the cash method of accounting (which is the most common) and have qualified expenses exceeding their reimbursement can deduct allowable moving expenses either in the year in which the reimbursement was received or the year in which the expenses were paid. Taxpayers can choose to deduct the expenses in the year of reimbursement even if they paid the expenses in a different year.

If expenses are deducted and the reimbursement is received in a later year, the reimbursement must be included in income