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.
At the hiring department’s discretion, it may choose to offer a new employee a predetermined amount to cover relocation costs, rather than reimburse for expenses actually incurred. Relocation bonuses must be paid through payroll and are subject to all applicable payroll taxes. If you need assistance with determining an appropriate amount for a relocation bonus, please contact the Compensation Department in Human Resources.
Moving expenses include all expenses incurred to physically move all household objects (includes pets and plants) and household members from the old home to the new home. Household members include family members who were residents of the old home that are also moving to the new home. Moving expenses paid to a third party vendor on behalf of an individual are taxable to the individual. All employee moving expenses are reported to Payroll.
House Hunting Expenses
House hunting expenses include all expenses related to visiting the St. Louis area, after an offer of employment has been accepted, for purposes of searching for a residence, familiarizing with the area, visiting schools, etc. House hunting expenses do not include expenses as described under Business Travel. Reimbursements for house hunting expenses are always taxable. House hunting expenses paid to a third party vendor on behalf of an individual are taxable to the individual. All employee house hunting expenses are reported to Payroll.
Recruiting expenses include travel expenses incurred to bring job candidates to the university for interviews, travel expenses incurred by the candidate that are directly related to the interview itinerary, and travel expenses incurred by the candidate’s accompanying spouse to the extent that the activities of the spouse are directly related to the interview itinerary.
Recruiting expenses do not include:
- Personal expenses. Examples of personal expenses include sightseeing expenses, hotel accommodations for periods longer than reasonably necessary for the interview itinerary, and travel expenses of additional family members (other than the spouse).
- Expenses incurred once a candidate has accepted an offer of employment, regardless of start date. Expenses incurred after the employment offer must be classified and substantiated as house hunting expenses, moving expenses, or business expenses.
Reimbursements of recruiting expenses incurred in accordance with the guidelines above are nontaxable expenses. Note: Nontaxable recruiting trips will generally be limited to two (2) per candidate as per IRS guidelines. If the department believes that additional recruitment visits may be required, please contact the Tax Department prior to making additional arrangements as exceptions to the rule must be well-documented to be supportable under IRS examination.
Business Travel Expenses
After an offer of employment has been accepted, visits to the university by the future employee for purposes of meeting with university staff, setting up laboratory or office space, and other similar business related trips should be reimbursed under normal business travel policies. Note: If the future employee is accompanied by a family member, the portion of travel expense incurred for the family member must be treated as house hunting expenses.