Only some non-taxable expenses

Some of the expense is taxable, some are non-taxable.  Non-taxable expenses are deducitble. 

https://ttlc.intuit.com/questions/2117559-can-i-claim-relocation-expenses-paid-by-employer-they-were-all-included-on-my-w-2-in-box-1

"Can the employee take a deduction on their individual income tax return for reimbursed moving expenses?

Reimbursed "non-taxable" moving expenses are not deductible on the employee's individual income tax return, if those expenses have not been reported as taxable wages. If the employee has been reimbursed for "non-taxable" moving expenses, either directly or via a third party, there are no tax implications on the employee's tax return (no moving-expense deduction should be claimed). If the amounts are reported as taxable in the W-2, the employee can take a deduction on their U.S. federal individual income tax return for the qualified moving expenses.

See earlier in the article on what is non-taxable.