|Activity:||Moving Expenses Reimbursement|
|Policy:||Human Resources Employee Relocation Guidelines|
Fiscal Misconduct, FIN-ACC-30
|Things To Know:||Please refer to Human Resources Employee Relocation Guidelines for procedures.|
Updates as of 1/1/2018
CHANGE IN TAXATION – MOVING EXPENSES (New Policy under development and will be linked when final.)
The tax laws that went into effect January 1st eliminated moving expenses as a non-taxable item. In the past, qualified moving expenses paid for directly by IU, were considered non-taxable to the employee. The basis for this non-taxation was driven by the fact that the employee, in the absence of the employer paying the expenses directly, was able to claim a moving tax deduction on their personal return. With the new Tax Reform Bill, this provision is now suspended and moving expenses will now be considered taxable income, effective 1/1/2018.Thus, IU will no longer pay moving expenses for employees. This will be negotiated by departments and paid as supplemental or additional pay and be taxed.
Moving Expenses – Processing:
If the moving expense is
- Already promised - Eligible Employee (EE) expenses incurred in 2017, paid in 2018, will be treated as nontaxable until June 30, 2018.
- Promised - “in the pipeline”. The account Fiscal Officer should work with their campus budget office to convert to supplemental pay, with gross-up to make EE “whole”.
- Not yet promised or paid (2018) – Units must process as supplemental pay through Payroll. Departments may choose to cover the applicable taxes (via gross-up).
Use Object Code 5070 Moving Expense.
For information on how to request a quote from a moving company and how to move households or offices, please see click Purchasing - Moving and Relocation.
See IRS 521: Moving Expenses for tax clarification such as 30 days in transit storage allowed as not taxable; over 30 days is taxable.
- Temporary housing reimbursement is taxable.
- House hunting trip reimbursement is taxable.
Mileage rate is determined by IRS Guidelines.
Email firstname.lastname@example.org or call 855-0375 with any tax questions.