Financial Policies Training:
Relocation Expenses (2.1.26)
Revised: March 11, 2011
These PowerPoint slides are intended for training purposes. In
the event of any discrepancy or interpretation difference
between the policy and the slides, the policy dictates.
Agenda
Relocation Expenses Policy
Guidelines and Procedures
Reimbursement of Expenses
Relocation Allowance
Direct Payment to Commercial Moving
Company
Suggested GL Accounts and
Resources
Relocation Expenses Policy
Funding for business-related relocation expenses
may be provided to
Newly hired faculty and staff
Current employees
Amounts
Not specifically limited
Based on org unit budgetary and market considerations
Documentation of agreed upon amount/expenses encouraged
Methods
Reimbursement of expenses
Relocation allowance
-OR-
(new)
In addition, direct payment by UC to a commercial
moving company permitted
Reimbursement of Expenses
Guidelines
Reimbursement through Payroll
Allowable expenses paid by relocating employee
Time and Distance Tests
(IRS)
If both tests are met – reimbursements may be
qualified (non-taxable) for certain allowable expenses
non-qualified (taxable) for certain allowable expenses
If tests are not met – ALL allowable
reimbursements are taxable (non-qualified) and
subject to withholding
Reimbursement of Expenses
Time and Distance Tests
Both tests must be met
(distance test) Distance between old home and new place
of work must be at least 50 miles farther than
distance between old home and old place of work
(time test) During 12-month period immediately
following the move, employee expected to work
full-time for at least 39 weeks
in general location of the new workplace
Specifics/examples: Tax Compliance web site
www.uc.edu/af/tax/Time_and_Distance_Tests.html
Reimbursement of Expenses
Qualified reimbursable expenses (non-taxable):
Payments to a commercial moving company
Charges for packing/crating/shipping household goods and
personal effects, including vehicles not used in the move
Cost of shipping pets
Cost of packing supplies
Insurance on such items as furniture and clothing
Truck rental for self-moving
In-transit storage for up to 30 consecutive days
Travel and lodging expenses for a single trip from the old
residence to the new residence for the employee and family
members, which may include:
Actual cost of gas, tolls, and parking, based on original itemized
receipts, or the current mileage rate for moving, as set
periodically by the IRS
Lodging while in transit
Air fare (coach only) and related ground transportation
Reimbursement of Expenses
Non-qualified reimbursable expenses
(taxable and subject to withholding):
Travel and lodging expenses incurred during
additional trips between the old residence and the
new residence
Expenses for meals at any point in the relocation
process
House hunting expenses for one trip (not to exceed
5 days), including appropriate transportation,
meals, and lodging
Temporary housing expenses following relocation
Reimbursement of Expenses
Non-reimbursable relocation expenses:
Storage (other than 30 days while in-transit)
Meals and travel costs incurred by laborers
Expenses incurred by persons not considered dependents for tax purposes
Utility and telephone installation charges
Loss of security deposits
Real estate expenses
Postage costs for realty and mortgage documents
Personal communication or entertainment expenses
Extraordinary items requiring special handling (e.g., boats)
Bank fees for cashier’s checks
Exceptions:
•
•
Above items may be reimbursed as a policy exception (Exceptions Form)
Require approval by senior vice president, vice president or dean
Reimbursement of Expenses
Procedure
Org unit
Reviews applicable receipts; retains receipts (do
not send to Payroll or HR Service Center)
Submits PCR in UC Flex using appropriate
relocation expense wage type
0MOV – qualified (non-taxable) relocation expense
0MVT – non-qualified (taxable) relocation expense
Payment occurs in next payroll cycle
Subject to payroll production deadlines
No payments prior to effective date of
employment
Relocation Allowances
Guidelines
Org unit provides a check or a direct deposit
in lieu of relocation reimbursements
May be in addition to direct payment to a
commercial moving company
Full amount is taxable income; deductibility
of qualified expenses is responsibility of
employee taxpayer
Relocation Allowances
Procedure
Org unit
Completes “Request for Prepayment of Relocation Expenses” form
(available online)
Obtains Dean, VP or designee signature on request form
Determines if relocating employee prefers a check or direct deposit (EFT)
for the relocation allowance
Provides relocating employee with “EFT Agreement for Individuals” form*
for completion (available on Accounts Payable web site) if direct deposit is preferred
Submits request form, along with A114 and if applicable, the “EFT
Agreement” form, to Accounts Payable, ML 0333
Retains copy of request form for their records
Accounts Payable
Processes request form
Forwards form to Payroll for tax reporting/withholding
Org unit
Provides relocating employee a copy of request form
* Note: EFT information provided on this form is for the relocation allowance only; direct
deposit information for payroll checks must be provided in Employee Self Service (ESS)
once the relocating employee has gone through the HR Onboarding process.
Relocation Allowances
Advantages of this method:
For org unit
Maintain budget control (provide agreed upon
amount prior to relocation)
Responsibility to determine tax deductibility of
expenses becomes that of the relocating
employee (taxpayer) not the org unit
For relocating employee
Funding provided in advance
No restrictions on funding use
Relocation Allowances
Guidelines
Org unit provides a check or a direct deposit
in lieu of relocation reimbursements
May be in addition to direct payment to a
commercial moving company
Full amount is taxable income; deductibility
of qualified expenses is responsibility of
employee taxpayer
Direct Payment to Commercial
Moving Company
Guidelines
If such expenses will be incurred
Direct payment – highly encouraged (but not
required)
Must use a moving company under contract with
university for direct payment
Exceptions require prior, written authorization from
Purchasing Department
Direct Payment to Commercial
Moving Company
Procedure
Org unit
Refers to Variant Expense Table
Moving companies under university contract
Steps for obtaining estimates
Creates, authorizes Purchase Order
Submits invoice referencing PO to Accounts
Payable
Recommended
General Ledger Accounts
532700 – Moving Expenses
530503 – Employee In-State Travel
530504 – Employee Out-of-State Travel
532500 – Rental & Lease
Resources
Financial Policies web site, www.uc.edu/af/policies, for
(under Financial Policies Documents) Relocation
Expenses (2.1.26)
(under Forms) The Request for Prepayment of Relocation Expenses
(under Forms) Exceptions Form
(under Policy Highlights/Quick Reference) Relocation Expenses Tip Sheet
Policy questions e-mail:
policyquestions@uc.edu
Variant Expense Table:
http://www.uc.edu/content/dam/uc/af/budgetfinsvcs/controller/docs/variant.pdf
Time and Distance Tests:
http://www.uc.edu/af/budgetfinsvcs/tax/resources.html#Relocation
IRS Publication 521, Moving Expenses:
www.irs.gov/pub/irs-pdf/p521.pdf