The Tax Cuts and Jobs Act suspends tax free reimbursement for qualified moving expenses to all employees, except for active military members. Any moving expenses incurred after December 31, 2017 paid directly to an employee, or paid to a third party on behalf of an employee, must be reported as taxable income for the employee. Employees may not deduct moving expenses either, according to the Act.
Employers paying third party vendors directly can use our Special W-2 Recordings form to report the amount paid on behalf of the employee. Employers have the option of covering the employee portion of FICA by grossing up the amount to cover the FICA taxes.
At this time it is unclear what, if any, changes will occur to individual states in regard to handling moving expenses. We will communicate any state changes when more information becomes available.
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