OBRA and NEPA change tax treatment of moving expenses and short-term assignments

The Omnibus Budget Reconciliation Act of 1993 (OBRA) has substantially modified the employment-related moving expense deduction, both by restricting the expenses that qualify and by moving the deduction above the line. As a result of OBRA, effective in 1994, moving expense deductions are allowed only for the reasonable costs of moving household goods and personal effects from the former residence to the new residence, and for traveling from the former residence to the new place of residence. Pursuant to NEPA and Rev. Rul. 93-86, travel expenses connected with, and the cost of meals and lodging at, an assignment away from the employee's tax home that is temporary are deductible.