Relocation Expenses Fact Sheet for Employees

(adapted from Wis. Stats. 20.917 and UW-System FPPP #19-Rev.)

The Revenue Reconciliation Act of 1993 separates relocation expenses into qualified (non-taxable) and non-qualified (taxable). Expenses allowed under FPPP #19 (Relocation and Temporary Lodging Reimbursement) and fall into the non-qualified category include reimbursements for moves less than 50 miles, temporary lodging, and stipends. Employers are required to report the non-qualified expenses on the W-2 form, and add the amount to gross wages. The qualified portion will be reported in box 13 of the W-2 form for informational purposes only. Employees will have no corresponding deductions unless they have unreimbursed deductible expenses.

 

I. Responsibility of Employing Unit

A.The Supervisor should complete and approve a letter requesting reimbursement of relocation expenses or complete the Request for Reimbursement for Relocation Expenses Form and send to the Appointing Authorities (i.e. U.W. Madison Dean/Director's or designee) for approval PRIOR to the completion of the relocation. This form can be accessed from Accounting Services website at http://www.bussvc.wisc.edu/acct/forms.html. Attach the approved letter of request or the form to the Travel Expense Report (TER) when submitting for reimbursement.

B.When approved, inform the employee of the regulations and restrictions for relocation expenses. Inform the employee that UW System Administration has non-mandatory contracts with two corporate moving companies for substantially reduced rates. The employee should be encouraged to utilize them. Refer to http://www.uwsa.edu/fadmin/fppp/fppp19at.htm for details.

C. Use Account Code 2146 for all household-moving expenses. Do not include expenses for moving office and lab equipment in these charges. You must process a requisition for moving office and lab equipment.

D. Inform the employee that the expenses reimbursed will be reported to the IRS as indicated above.

E. The Dean's/Director's Office should consult with the Travel Office in advance of moves to/from foreign countries.

II. Responsibility of Employee for Relocation Expense Claim (review regulations with employing department)

A.The employee is responsible for selecting a household moving company and arranging the terms and conditions of the move. If not using the contract vendors, or the appointing authority assigns a maximum reimbursement limit of  $3000 or less, then the employee must obtain three estimates and choose the most cost effective option.

B.When approved, inform the employee of the regulations and restrictions for relocation expenses. Inform the employee that UW System Administration has contracts with corporate moving companies for substantially reduced rates. The employee should be encouraged to utilize them.

C.The employee must make the payment and will be reimbursed upon submission and approval of a TER containing itemized receipts and the bill of lading. Attach all of the estimates to the TER.

D.The employee may request an advance of up to 80% of the cost of the lowest estimate. Submit the Request for Travel Advance (obtain from Dept./Dean's Office) approximately 14 days prior to the move. Original signatures are required. Attach a copy of the lowest estimate and prior approval letter or the Request for Reimbursement for Relocation Expense Form (http://www.bussvc.wisc.edu/acct/forms.html).

E.When an employee is moving his/her own possessions without hiring a mover, the following applies:

  1. Reimbursement is limited to "actual, reasonable, and necessary costs" for any hired labor. This includes loading and unloading household goods, rental of trucks, trailers, moving equipment, gasoline, containers; or other legitimate expenses incidental to the move.
  2. Reimbursement for an employee and/or their dependents' time is not allowed.
  3. Itemized original receipts must support claims.
  4. Estimates are not required for self-moves.

F.Reimbursement will be reported to the IRS as indicated above and a W-2 statement will be provided at the end of the year.

III. Reimbursement for the combination of costs transporting household effects, and transporting the employee's immediate family may not exceed the approved amount. The employee may make the payment and be reimbursed after the move has taken place.

A.Reimbursement of Direct Costs associated with the moving of household goods includes personal effects of the employee and his/her immediate family. These items include furniture, clothing, musical instruments, household appliances, food and other items associated with the maintenance of a household and may be legally transported in interstate commerce. It does not include such items as property for resale or disposal, automobiles, motorcycles, boats, pets, and other non-household items. The following Direct Costs associated with the moving of household goods are reimbursable:

  1. 1.linehaul (see Sec. III, of FPPP #19 for restrictions)
  2. 2.insurance surcharge (not to be confused with valuation/additional insurance)
  3. 3.seasonal rate adjustment
  4. 4.long carry, stairs, elevator
  5. 5.piano or organ
  6. 6.extra labor
  7. 7.ferry
  8. 8.appliance service
  9. 9.packing, purchase of containers and packing material10.unpacking

B.Reimbursement of Incidental Costs of relocating is discretionary and paid as a stipend as a fixed amount up to $1000. This is paid in connection with the move; no receipts are necessary. The intention of the stipend is to help defray costs not paid for as Direct Costs (see Sec. III. A. above). Examples are:

  1. valuation (additional insurance)
  2. extra pickup of household goods; storage for the convenience of the employee; warehouse handling
  3. extra auto (hauling or towing); this differs from one-way payment described below in Sec. III. C.
  4. enroute travel costs (meals, lodging, tolls, etc.)
  5. overtime loading
  6. loading or unloading of automobiles, trucks, motorcycles, specialty vehicles
  7. weight additives for transporting any bulky articles
  8. other costs associated with the move

C.When transporting the employee and family, the one-way mileage cost of moving one vehicle to the new residence is reimbursed at the present mileage reimbursement rate allowed. Base mileage on using the most direct route not exceeding mileage as shown on the Bill of Lading.

IV. Constraints set by Section 20.917 of the Wisconsin Statutes.

A. Reimbursement to employees who make international moves is at a rate not to exceed that available to federal appointees. The Dean's/Director's Office should contact the Travel Office regarding a new hire moving to/from a foreign country or refer to the terms of the grant.

B. The Dean's/Director's office may approve reimbursement for piecemeal moves. The total cumulative reimbursement of moving household effects on a piecemeal basis may not exceed the amount charged if the move had been accomplished in one trip from the original destination. Obtain and attach estimates showing the total cost had the move taken place in one trip from the original destination.

C. Attach the approval for a piecemeal move to each TER. Attach copies of any prior accountings each time for any additional submission for payment.

D. No more than TWO RELOCATION REIMBURSEMENTS may be granted to any employee in a calendar year.

V. A Temporary Lodging allowance requires prior approval from the appropriate Appointing Authority (U.W. Madison Dean/Director's or designee). The reimbursement may not exceed 45 days and shall not exceed the in-state lodging maximum for a single rate. The 45 days need not be consecutive. Meals are not reimbursable. Temporary lodging is a non-qualified (taxable) reimbursement.


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