IRS Refunds Employer 2018 by employees in 2017 removals are generally tax-free
WASHINGTON – The employer payments or reimbursements in 2018 for employee moving expenses incurred before 2018 are excluded from the employee’s wages for wage and tax purposes, today announced the Internal Revenue Service.
Law Jobs and Tax Reduction (TCJA) 2017 suspended the income exclusion for moving expenses reimbursed or paid by an employer for most employees from 2018, making these amounts are taxable, except amounts for active duty members of the US Armed Forces. UU. whose changes are related to a permanent change of station.
Under Notice 2018-75 (in English) published today on IRS.gov, refunds that an employer pays an employee in 2018 by qualified moving incurred in a prior year expenses are not subject to federal income or employment taxes. The same is true if the employer pays a moving company in 2018 by qualified moving services provided to an employee by 2018.
To qualify, refunds or payments should be moving expenses related to work that would have been deductible by the employee if the employee had paid directly by 1 January 2018. The employee should not have deducted in 2017. For more information about the 2017 rules, see Form 3903 or Publication 521(in English).
Employers who have already tried reimbursements or payments as taxable can follow the normal procedures of adjustment and employment tax refund. See Section 13 of Publication 15 (in English) or Form 941-X and its instructions for details.
Updates on this and other provisions of TCJA can be found in IRS.gov/reformatributaria .