Relocation Expenses

As of January 1, 2018, relocation expenses paid by the University will be treated as taxable income to the employee.  In situations where a department agrees to pay the relocation costs for an individual, the process remains relatively unchanged, but the tax liability to the employee will increase.

 

Reimbursements of Relocation Expenses

All expenses must comply with the University's Travel and Business Expense Policies, and the newly hired employee should be informed of this prior to incurring expenses.  There are three primary ways a department can pay for relocation expenses for a new hire:

 

1.  Travel and Business Expense Reimbursment (TBER) Form

  •  For expense reimbursements after the date of hire, departments should complete a TBER and submit his/her receipts for reimbursement.
  • The ChartString used for these expenses must include the relocation natural account, 66040.
  • Accounts Payable will review these charges on a monthly basis, and report to payroll the relocation expense to be entered as imputed income on the individual's paycheck.  This imputed income will typically appear beginning in the check two months following the TBER reimbursement.

 

2.  Check Request Form

  •  For expense reimbursements prior to the date of hire, departments should submit a check request form to Accounts Payable.
  • The ChartString used for these expenses must include the relocation natural account, 66040.
  • Accounts Payable will review these charges on a montly basis, and report to payroll the relocation expense to be entered as imputed income on the individual's paycheck. This imputed income will typically appear beginning in the check following the employee's hire date.

 

3. Direct Payment to the Vendor

  •  A department may choose to create a Voucher in order to pay the vendor directly on the employee's behalf.
  • The ChartString used for these expenses must be the relocation natural account, 66040.
  • Accounts Payable will review these charges on a monthy basis, and report to payroll the relocation expense to be entered as imputed income on the individual's paycheck. This imputed income will typically appear beginning in the check two months following the TBER reimbursement.

 

Prior to January 1, 2018, only qualified moving expense reimbursements are non-taxable to the employee. Non-taxable, “qualified”, moving expenses (as long as new location is at least 50 miles away from the old location per IRS regulations) include:

  • Packing of furniture and personal belongings.
  • Transportation (moving) of furniture and personal belongings from the previous principal place of residence to the new principal place of residence, which must be at least 50 miles apart.
  • Insurance and in-transit storage for periods of up to 30 days from the move date.
  • Travel and lodging costs, excluding meal costs, associated with one trip to move to the new residence by the employee and members of the employee’s household. 

Taxable moving expenses include:

  • Pre-move house hunting, including travel, meals and lodging once an offer has been accepted.
  • Meals and lodging while occupying temporary quarters.
  • In-transit storage charges beyond 30 days.
  • Personal needs such as a driver’s license and auto insurance.
  • Real estate fees incurred when leaving the former residence or acquiring the new residence.
  • Relocation allowance (unsupported by receipts)


Documentation Required

The original receipts/invoices must be provided and meet the requirements as documented in the Travel and Business Expense policies.  In general, the receipts should demonstrate:

  • the date
  • the item or service purchased
  • the total amount of the purchase
  • proof of payment
  • the recipient’s name, home address and Social Security number (if taxable) to be reported to Payroll for reporting on the employee’s annual Form W-2

DAF approval must be provided to authorize the relocation allowance or moving expenses.  The employee should be aware of any tax implications.

A moving expense worksheet is available to organize and document moving expenses. The IRS standard mileage rate for relocation is 18 cents per miles driven.