Updated On January 26, 2018 - 11:19am

Moving Expenses Are Now Taxable

 

UCLA Corporate Financial Services

   Tax Services

Deans, Directors, Department Chairs, and Administrative Officers

Dear Colleagues:

With the recently-passed federal tax legislation, many provisions will affect the University of California. One provision that will have an immediate impact on the University and its employees relates to the reimbursement/payment of moving expenses.

Moving Expenses are now taxable.

Prior to the new tax legislation, qualified moving expense reimbursements were either deductible on an individual’s tax return, or excludable from the employee’s income if reimbursed by an employer. The typical scenario at UCLA involved a new employee who moved from outside Southern California to Los Angeles and was reimbursed for some or all of their moving expenses.

The new tax law treats all moving expense payments/reimbursements as nondeductible/taxable. Therefore, effective January 1, 2018, all moving expense payments or reimbursements are taxable to the employee and will need to be processed through Payroll. Amounts would be treated as taxable whether they are reimbursed to an employee or paid directly to a vendor. Please note that although all moving expenses are taxable, reimbursements/payments are still limited to those expenses which are allowed under UC Policy G-13 (PDF). Moreover, departments may choose not to reimburse moving expenses.

As stated above, other sections of the tax legislation will affect the University. We are currently working through these issues and will update the campus in the coming weeks. If you have any questions please contact me at smonatlik@finance.ucla.edu.

Sincerely,

Scott Monatlik
Senior Director, Tax Services
Corporate Financial Services