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.