Magazine article HRMagazine

Are Moving Expenses Considered Taxable Income?

Magazine article HRMagazine

Are Moving Expenses Considered Taxable Income?

Article excerpt

It depends. The IRS will consider relocation reimbursements as "qualified fringe benefits" and exclude them from taxable income if the expenses paid by the employee are closely related to the time when he or she starts work at the new job location. Generally, moving expenses incurred within one year from the date the employee first reports to work at the new location qualify.

In addition, the employee must work full time for at least 39 weeks in the first year after arriving in the new location. Moreover, the new job is required to be at least 50 miles farther from the employee's former home than the old job was from that location.

Some expenses that can be excluded from taxable income are the cost of moving the employee's household goods and personal effects from the former home to the new residence and the cost of storing the employee's household goods for a certain period of time.

However, not all moving expenses can be excluded from taxable income. …

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