Relocation Expense Payments

NEW! Under the Tax Cuts and Jobs Act of 2017, the personal deduction for relocation expenses and the exclusion from income of employer-paid relocation expenses are suspended from January 1, 2018 through December 31, 2025.  As a result, all moving expenses incurred on or after January 1, 2018, whether reimbursed to an individual or paid to a vendor on behalf of an individual, are taxable income to the individual.

Information provided below pertains to relocation expenses incurred prior to January 1, 2018.

General Rules for Relocation Expenses

Relocation expenses include moving expenses and house hunting expenses. They do not include recruiting expenses or business travel expenses. Relocation expenses, whether reimbursed to an individual or paid to a vendor on behalf of an individual, may or may not be taxable income to the individual. See Definitions link at the bottom of this page for definitions of italicized words.

Relocation expenses may be reimbursed to an individual or paid to a vendor on behalf of an individual. Those paid to third parties on behalf of an individual may be paid via Purchase Order, Check Request, or Procurement Card. Any expenses a department agrees to pay and for which the appropriate departmental approvals have been obtained are allowable. Under the IRS guidelines, you must meet certain criteria to be eligible to receive tax-free reimbursements for moving expenses. For additional information, see Qualifying for Nontaxable Moving Expenses below. If you are not eligible, all reimbursements for moving expenses are treated as taxable.

If you are eligible for nontaxable moving expenses, a determination must be made regarding which moving expenses are nontaxable expenses and taxable. The university relies on IRS Publication 521 and other IRS materials to determine the taxability of moving expenses. Expenses that may or may not be taxable will be reimbursed to the recipient as taxable income. It will then be up to the recipient to determine whether the expenses qualify as nontaxable moving expenses that may be deducted on the recipient’s US tax return. For additional information, see Taxable & Nontaxable Moving Expenses below.

For the full Relocation Expense Guide click here.


Definitions

Helpful definitions for common relocation terms

Procedures for Processing Relocation Expenses

General procedures and forms

Taxable & Nontaxable Relocation Expenses

Determine which expenses are nontaxable