To avoid new employee frustration, it is important that all university staff and faculty members understand and consistently apply the rules surrounding the taxability of recruiting and moving expense reimbursements. This involves clear communication to recruits, both verbally and in our offer letters, of the IRS rules, so that we set appropriate expectations throughout the recruiting and hiring process. Please note that the university does not cover moving expenses for all new or transferring employees; paying for such items is entirely at each unit's and human resource's discretion. When the university does agree to pay for these items, they will generally be included in an employee's offer letter.
All reimbursements for moving or relocation costs made to employees or paid directly to third parties on or after January 1, 2018 are included in taxable wages, and subject to all income and employment taxes.
Any expenses reimbursed or paid on behalf of an individual being recruited are considered recruitment expenses. These expenses are not taxable to the individual being recruited. Once the individual has accepted an offer, they are no longer in recruitment status and, therefore, the expenses are related to moving and relocation.
Once an offer has been accepted and in the event that the university pays for the new hire's moving expenses, all relocation and moving expenses paid by the university are taxable wages, including:
If you have any questions regarding the specific tax treatment of an expense reimbursement, please contact your unit human resources representative or the Tax office at firstname.lastname@example.org.