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Employee Moving Expense Reimbursement Now Taxable

The new tax law passed at the end of 2017 changed the taxation of the reimbursement of an employee’s moving expenses. Previously, an employer could reimburse an employee for qualified moving expenses and the reimbursement would not be subject to income or employment taxes. Under the new tax law and starting as of January 1, 2018, any amounts paid as a reimbursement of an employee’s moving expenses are subject to income and employment taxes. These amounts would be included as taxable wages on an employee’s W‑2. Employers can still reimburse reasonable moving expenses but the employer should make sure that all amounts reimbursed are treated as taxable wages subject to income and employment tax.

DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.

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