irs link

http://www.irs.gov/publications/p521/index.html

from previous link:

"Your Generous Boss
If you get reimbursed for some or all of your moving expenses, don't get too greedy and try to double dip. You're not allowed to deduct moving costs if they are paid by your employer.

There are two ways for your company to pay your moving costs. It can give you tax-free reimbursements for the amounts you could have deducted yourself (see list above), or it can add the reimbursement to your salary.

If your employer gives you a tax-free reimbursement, your job is pretty easy. Do nothing. The expenses have already been effectively deducted because the reimbursement was not included in your wages. The amount of the reimbursement will show up as a miscellaneous nontaxable item on the W-2 form that your employer sends you, and you won't have to fill out any extra tax forms.

If your employer simply adds the reimbursement of your moving expenses to your salary, then you have to fill out Form 3903 to get your deduction. The same is true if you're self-employed. You'll be able to deduct only what the IRS allows, no matter how much your employer gives you. So if your boss is more generous than the IRS and pays for things like meals and temporary housing while you wait to move into your new home, then you will have to pay income tax on that money.

How do you know if your boss is being generous? Usually you fill out a form at work detailing your expenses, and your employer calculates what is deductible.

There is one accounting oddity involving moving that you should be aware of, because it can save you time and money. Often your employer will give you a check to cover your moving expenses before you actually hit the road. But what happens if you get the check in December and move in January? Do you have to pay taxes on the money in the first year, then deduct your moving expenses in the second? No. In a rare exception to standard tax accounting rules, you can deduct your move in the year you receive the reimbursement, even if the move takes place in the next tax year.

So in this case, my advice is to hold off filing your taxes until you complete your move. If you haven't moved by April 15, then you should file for extensions until you are safely settled in your new home and can account for all your allowable moving expenses. "