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Employee Moving Expense Reimbursement

Tax Bill-Moving Expenses Taxable Effective 1/1/2018

Recent federal tax legislation removes exemptions applicable to moving expense direct pays and reimbursements. Under the new law, which becomes effective 1/1/2018, all payments for moving expenses to, or on behalf of an employee must be reported as wages and taxes must be withheld.

Accordingly, beginning on 1/1/2018, all reimbursements of moving expenses to current or prospective employees will be reported to Payroll so that the appropriate taxes may be withheld from employee paychecks. This is true event if the expenses were incurred in a prior year, and the employee is not reimbursed until 2018.

Likewise, when UConn Health contracts with a moving company to assist an employee with a move taking place on or after 1/1/2018, then the payment to the moving company, once invoiced and paid, will be reported to Payroll so that employees  may be taxed appropriately.

In the coming days, UConn Health will revise its Moving Expense Reimbursement Policy in light of these changes. In the meantime, departments and administrative units are requested to keep these issues in mind, and may consider communicating this issue to new or prospective employees who may be eligible for moving expense payments under an offer letter.

 

Steps in the process of obtaining approval for a candidate move:

Moving allowances should be spelled out in the candidate’s offer letter and approved by the Executive Vice President for Health Affairs

Successful candidates must submit at least two quotes from movers in his/her area. UConn Health will use the lower of the two quotes. (The candidate may elect to utilize the mover who has submitted the higher quote, however, UConn Health will only pay the amount of the lowest quote for the move.)

A Note About Moving Quotes: Care should be given to ensure that the candidate understands their moving quote and ensures that the quote encompasses all services needed. Quotes based solely on phone conversations are discouraged and on-site quotes are encouraged. Where possible, candidates should request binding quotes.

Preparing the Move Request Form: The candidate’s department prepares an Employee Move Request Form, attaches the two quotes and a copy of the offer letter and obtains signatures from department head. The form allows for expenses associated with moving an employees household possessions, travel/mileage costs, and food and lodging subject to the limits below. Once completed, the form should be forwarded to the Finance Manager (MC 5305) for review and recommendation of approval from Executive Vice President.

Once the request has been approved by the EVP, the original is returned to the originating department.

Also of note, we use IRS guidelines in determining eligibility and mileage reimbursement rates. Therefore an employee is subject to the IRS’s 50 mile moving radius criteria and will be reimbursed for mileage at the IRS standard mileage rate for moving.

The current rate for moving on or after January 1, 2018 is 18 cents per mile. The previous moving rate was 17 cents per mile.

The table below provides the allowed moving amounts based on the distance moved. All amounts claimed must be backed up with receipts.

Moving Distance Days Allowed Lodging Meals Per Person
0-450 1 $100.00 $49.00
451-900 2 $200.00 $98.00
901-1350 3 $300.00 $147.00
1351-1800 4 $400.00 $196.00
1801-2250 5 $500.00 $245.00
2251-2700 6 $600.00 $294.00
2701 and Over 7 $700.00 $343.00
 The moving expenses offer may then be made to the candidate.

 

Candidate/Employee Moving Expense Reimbursements

Upon the completion of the candidate/employee’s relocation, the candidate/department fills out the Miscellaneous Payment Reimbursement Form.

Have the candidate/employee sign and date the Miscellaneous Payment Form before it is submitted.

Submit the completed Miscellaneous Payment Reimbursement Form with all supporting documents (paid receipts, approved candidate/employee Moving Expense Request) to the Director of Finance for review and approval.

Once approved, the Director of Finance will determine the taxable and nontaxable portions of the reimbursement and send to HR for payment.

The department should retain a copy of the complete package including copies of all receipts for future reference.

The reimbursement will be made with the employee’s payroll check.

Please note that moving reimbursement is just that reimbursement for the movement of a household’s tangible items from one location to another and therefore does not include the following:

  • House hunting, home selling costs, losses on sale of housing, etc., and/or moving of lab materials/equipment.