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 even if the expenses were incurred in a prior year, and the employee is not reimbursed until 2018.
Likewise, when the University 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, the University 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.
For more information, contact: Nicholas Ferron at nicholas.ferron@uconn.edu