Accounting Policies (APPR07)

OVERVIEW

This procedure provides guidance for the processing of moving expenses, in addition to those specified for Purchase Order-Related payment processing.

REQUIRED FORM(S)

None

PROCESSING STEPS

All movement of household goods as part of moves/relocations of University personnel should be coordinated with the Purchasing Department using procedures included in Section 6.4 of the Purchasing Policies and Procedures Manual. The Processing of move-related invoices and expenses should follow the general guidelines for Purchase Order-Related payment processing. The purchase order must fund the total cost of the move, not just the anticipated University share. As soon as the total relocation costs are known, the employee share will be computed and credited back to the department by the Controller's Office.

For travel expenses being reimbursed to the employee, use the Travel & Business Expense Report (TER). Complete the left portion of the form showing expenses by type (mileage, airfare, lodging, meals, etc.). The Accounting Distribution portion on the right of the TER would charge the total to Account 7835. If reimbursement is made based on mileage, that mileage needs to be stated on the form. The amount actually paid to the employee may be reduced due to the overall relocation cost limit and/or tax requirements.

Any other expenses paid by the department or reimbursed to the employee should be processed using normal Purchase Order, Direct Pay Request or TER procedures, except that the account charged will be 7835 - Relocation and Moving Expenses.

Current tax code limits expenses an employee can deduct for income tax purposes, called qualifying expenses, to (1) transportation of household goods and effects and (2) travel (including lodging but not meals) to the new residence. Where an automobile is used in making the move, the employee may deduct either actual out-of-pocket expenses incurred (gasoline, repairs, etc.) or a standard mileage allowance set by the IRS for moving (which currently is 10 cents per mile). Expenses such as house-hunting trips, meals enroute, and temporary living expenses are not deductible and must be treated as taxable income. Any mileage reimbursement above the IRS moving rate, storage over 30 days and any general "relocation allowance" will be taxable income also. If any of these non-deductible expenses, called non-qualifying expenses, are reimbursed to the employee by the University, the Controller's Office will separate these from other reimbursements requested on the DPR or TER. The Payroll Office will pay the non-qualifying reimbursement through the next payroll and make required income tax withholding and FICA deductions. If the department pays a non-qualifying expense directly, additional payroll tax withholding may be required.

The Controller's Office will prepare and send an expense recap to the employee and to the department for the employee share of the total expense once all the invoices have been processed. They will also advise the employee of the amount of reimbursement that is taxable/nontaxable and amounts withheld. The Controller's Office will work with the department to collect the amount due from the employee. The employee can pay by check or payroll deduction. If the employee chooses to pay their share of the expense via payroll deduction, the Controller's Office will work with the employee to complete a payroll deduction form and submit it to the Payroll Office. The deduction period is limited to 12 months.

All appropriate reimbursements will be included on the employee's W-2, Wage and Tax Statement, for the year.