Tax Scenario - Moving Expenses

A faculty member accepts a position at the University to begin in August, but asks for a "pre-house-hunting" trip to be paid by the University as part of his/her package. The department agrees and writes the request into the employment contract.

Issue: Only the physical relocation of the faculty member's household goods falls within the permissible qualified expenses for moving. Thus, anything outside of this would be considered nonqualified and taxable to the individual.

In this case, the entire pre-house-hunting trip is taxable and reportable to the employee. Our current procedures call for the reimbursement to be made at the time the employee is placed on payroll. This way, the entire amount can be added to the paycheck and have employment taxes deducted from the reimbursement.

If the employee cannot wait until they are placed on the regular payroll based on their start date, there is a way to place them on the payroll early, so that the reimbursement may be processed before the start date of the employee. Contact Payroll Operations for the procedures.