12.5 The 39-Week Test for Employees

In addition to meeting the distance test (12.4), you must work in the locality of the new job as a full-time employee for at least 39 weeks during the 12-month period immediately following your arrival at the new job location. You do not need to have a job prior to your arrival at the new location. Your family does not have to arrive with you. The 39 weeks of work need not be consecutive or with the same employer. You may change jobs provided you remain in the same general commuting area for 39 weeks. The 39-week test does not apply to employees who become disabled and lose their jobs, or who die.

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image Planning Reminder
Loss of Job
If you lose your job for reasons other than your willful misconduct, the 39-week requirement is waived. Should you resign or lose your job for willful misconduct, a part-time job will not satisfy the 39-week test. The time test is not waived because you reach mandatory retirement age first where this retirement was anticipated.
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If you are temporarily absent from work through no fault of your own, due to illness, strikes, shutouts, layoffs, or natural disasters, your temporary absence counts toward the 39-week requirement as full-time employment.

EXAMPLE
You accept a position with a company 600 miles from your former position. You move to the new location. After you have worked in the new position 14 weeks, you resign and take another job with a nearby company. You may add the 14 weeks of work with the first company to 25 weeks with the second company to meet the 39-week requirement.

Job transfers.

The 39-week period is also waived if you are transferred from your new job for your employer’s benefit. However, it must be shown that you could have satisfied the 39-week test except for the transfer.

What if you initiate the transfer? The IRS held in a ruling that the 39-week test is not waived if an employee initiates the transfer, even if the employer approves. An individual was not allowed to deduct the costs of moving across the country to take a government position when, within 39 weeks of taking the position, he applied for and took another government job in another area. The IRS disallowed the deduction, although the government reimbursed part of the employee’s moving expenses to the new job post, thereby indicating that it considered the transfer to be in the government’s interest. According to the IRS, the waiver of the 39-week test applies to transfers initiated by employers, not by employees.

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image Filing Tip
Job Status
For purposes of the 39-week test, full-time status is determined by the customary practices of your occupation in the area. If work is seasonal, off-season weeks count as work weeks if the off-season period is less than six months and you have an employment agreement covering the off-season.
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Joint returns.

On a joint return, either spouse may meet the time test. But the work time of one spouse may not be added to the time of the other spouse.

EXAMPLE
Smith moves from New York to a new job in Denver. After working full time for 30 weeks, he resigns from his job and cannot find another position during the rest of the 12-month period. He may not deduct his moving expenses. But assume that Mrs. Smith also finds a job in Denver at the same time as her husband and continues to work for at least 39 weeks. Since she has met the 39-week test, the moving expenses from New York to Denver paid by her husband are deductible, provided they file a joint return. However, if Mrs. Smith had worked for only nine weeks, her work period could not be added to her husband’s to meet the 39-week test.
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