There has been a change to the tax law that governs reimbursement for relocation expenses, specifically the Tax Cuts and Jobs Act of 2017. Previously, employers were allowed to exclude portions of these expenses, such as moving expenses, from taxable income. Employees that received reimbursement for relocation expenses would receive a check via Accounts Payable not subject to tax withholdings.
Under the new tax law, the exclusion from income of employer-paid relocation expenses was suspended from January 1, 2018 through December 31, 2025. As a result, all moving expenses incurred on or after January 1, 2018, are now taxable income to the individual. Any authorized reimbursement for relocation expenses for HRI employees will be made through HRI’s payroll system. This means that applicable deductions for taxes such as federal, New York State, FICA, and Medicare, as well as additional deductions for retirement contributions and Paid Family Leave, will also be withheld. The HRI award that funds an employee that is reimbursed for relocation expenses will be charged the cost of the reimbursement, plus fringe and applicable indirect costs.
If you have any questions regarding the allowability of relocation expenses on a particular award, please contact your Grant Administrator or Michael Saglimbeni, Director of the Office of Sponsored Programs, at 518-431-1265. For questions regarding reimbursement and withholdings, please contact the HRI Payroll Department at payroll@healthresearch.org.
Please note that any new employee who receives relocation reimbursement will be notified by the Human Resources Department that the reimbursement will be considered taxable income.
