Travel Related to Relocation
Due to changes in the tax code, all moving expenses either reimbursements or payments on behalf of employees are taxable, effective for expenses incurred on or after January 1, 2018. Furthermore, moving expenses will no longer be deductible on an individual’s personal tax return. These changes may have significant tax consequences for employees receiving compensation for personal moving expenses.
This change includes all personal moving expenses, and applies whether the individual pays for expenses and is reimbursed or UW pays a third party for the expenses directly. Furthermore, these payments are taxable without regard to whether receipts and/or appropriate documentation is provided.
Departments paying moving expenses are to use Onetime payment – Moving Expenses in Workday (https://isc.uw.edu/user-guides/request_one_time_payment_ap/). Using this process will ensure that new employees do not receive reduced paychecks while the required tax withholding and payroll tax payments are deducted, and will ensure that proper withholding is handled accurately. Departments are also encouraged to review all departmental communication to prospective employees regarding the taxability of moving expenses.
Lump Sum Moving Allowance
The lump sum is intended to be used for all moving and travel expenses associated with the move and the employee should not expect additional payments or reimbursements. For questions contact firstname.lastname@example.org. See Payroll Office
The full amount of the relocation incentive payment must be repaid to the University if within one year of the date of appointment the employee voluntarily terminates employment or engages in behavior that makes termination of employment necessary. Termination of employment as a result of layoff, disability separation, or other good cause as determined by the provost or vice president for Human Resources (or their respective designees) does not require repayment of the relocation compensation.
What would cause an employee to be required to pay back the relocation payment?
If the employee receiving the relocation payment terminates or causes termination with the state within one year of the date of the appointment or transfer, that employee may be required to pay back the lump sum payment. If the termination is a result of layoff, disability separation, or other good cause as determined by the agency director or higher education president, the employee will not have to pay back the relocation payment.
Statutory Authority: Chapter 41.06 RCW