Question

Is it true that generally, if the taxpayer moved out of California in connection with a new job, the moving expenses are not deductible on the California return.8090

Answer 1

Not necessarily — that statement is too broad.

Key points:
- California generally allows the moving‑expense deduction (California did not adopt the federal suspension of the deduction), so moving expenses can be deductible on a California return in many situations even though they aren’t deductible federally.
- However, whether you can claim them on a California return depends on your residency status and the source/allocation of the income:
- If you were a California resident when you paid the moving expenses (or are a full‑year resident), you can generally claim the deduction on your California return even if the move was to another state.
- If you became a nonresident or part‑year resident and the move was to take a job outside California, California only allows deductions allocable to California‑source income. Moving expenses attributable to out‑of‑state income generally aren’t deductible against California taxable income for nonresidents/part‑year residents.
- Special rules apply for active‑duty military moves.

If this applies to a specific year or situation, check the California Franchise Tax Board instructions for Form 540/540NR or consult a tax professional to determine the proper allocation.