Relocation Expenses Policy

Reimbursement of Relocation Expenses

Summary

A hiring manager has the option to extend relocation benefits to newly appointed full-time faculty or senior-level staff with VP approval only and within the limits of this policy. For staff positions, HR must also approve the request, including the amount to be paid out of its centralized relocation budget. If relocation benefits are approved, they must be described on the appointment form (faculty) or personnel action form (staff) in the "special conditions" section to ensure proper processing by HR and Financial Operations.

Tax Rules

Pursuant to IRS regulations, some relocation expenses are subject to income and employment tax withholding. These are referred to as "nonqualified" expenses. Relocation expenses that are not subject to income and employment tax withholding are referred to as "qualified" expenses. Nonqualified reimbursements are reported on the annual Form W-2 in Box 1, while qualified reimbursements are reported in Box 14.

Distance Rule

IRS guidelines for reimbursement require that the distance between the old home and the new place of work be at least 50 miles greater than the distance between the old home and the old place of work. If the distance test is not met, then moving reimbursements will be reported as taxable income subject to applicable income and employment taxes.

Qualified Relocation Expenses (reimbursable relocation expenses not subject to withholding)

  • Commercial moving company
  • Charges for packing, crating, mailing and/or shipping household goods; and other miscellaneous packing supplies
  • Optional insurance on items such as furniture, clothing, and utensils
  • Rental truck
  • In-transit storage for up to 30 consecutive days
  • Shipment of car(s), if not used in the move
  • Travel and lodging costs for the employee and family member(s), one trip each, from the old residence to the new residence. Examples:
  1. Actual gas cost, based upon receipts or IRS current rate for personal or rental vehicles as indicated on the Relocation Request Form
  2. Lodging in transit, follow current federal per diem rates for the cities involved
  3. Airfare (coach only)
  4. Rental car (economy); in certain circumstances a larger vehicle may be rented with documented advance department approval
  5. Tolls, taxi, limousine, or parking
  6. Pet shipping charges

 

Non-qualified expenses (reimbursable relocation expenses subject to tax withholding)

  • Travel and lodging costs incurred during additional trips from the old residence to the new residence.
  • Cost of meals at any point in the relocation process. Follow current federal per diem rates for meals and incidental expenses. Meal receipts are not required for expenses under $25.
  • House hunting expenses (one trip, not to exceed five days) may include:
  1. Actual gas cost, based upon receipts or IRS current rate for personal or rental vehicles
  2. Lodging, follow current federal per diem rates for the city involved
  3. Airfare (coach only)
  4. Rental car (economy); in certain circumstances a larger vehicle may be rented with documented advance department approval
  5. Tolls, taxi, limousine, or parking
  6. Temporary housing
  7. Rental search and tour expenses.

Non-Reimbursable Expenses

  • Storage (excluding 30 days in transit)
  • Meals and travel costs incurred by laborers
  • Expenses incurred by persons not considered to be dependents for tax purposes
  • Utility and telephone installation charges
  • Loss of security deposits
  • Real estate expenses, except house hunting expenses as described above
  • Postage costs for realty and mortgage documents
  • Personal telephone calls, tips, movies, or other entertainment
  • Extraordinary items requiring special handling (e.g., boats)
  • Bank fee for cashier's checks

Procedure for Payment of Moving Expenses

Relocation reimbursements should be negotiated with the new faculty or staff member during the hiring process after obtaining the necessary approvals. It is important to inform the new employee that applicable taxes are withheld for "non-qualified" expenses as defined in the policy. A copy of this policy should also be provided with the letter of offer. Call the Office of Human Resources, or Financial Operations for clarification or assistance.

Reimbursements Paid to the Employee

After an employee's move, the employee must forward relocation receipts to his or her Department Head, who will fill out a check request form and submit it with receipts to Financial Operations. Upon receipt of the check request for reimbursement of relocation expenses, the Assistant Treasurer will determine what is taxable and what is not and inform the employee. Under no circumstances will the amount paid exceed the amount offered in the contract/offer letter.

Limits

Tenure-track faculty, new faculty joining us with tenure,

executive level staff up to $5,000

Senior level staff up to $3,000

 

last revised 12/11/2009