Taxation of Moving and Relocation Expense Reimbursements

The Tax Cuts and Jobs Act of 2017 requires reimbursed and qualified moving expenses of household goods to be reported on an employee’s Form W-2. Qualified moving expenses are reported in the year an employee is reimbursed or in the year a payment is made on behalf of an employee.

Moving expense payments may also be subject to the following payroll withholding:

  • Federal Income Tax – 22%
  • State Income Tax – 6.6%
  • Social Security Tax – 6.2% (Subject to Annual Limits) or Defined Contribution Plan (DCP) – 7.5%
  • Medicare Tax – 1.45% or 2.35% (if wages exceed $200,000)

Medicare and Social Security/DCP deductions are only applied if an employee is subject to FICA.

Moving expenses related to the moving of lab equipment or libraries are not subject to this reporting. For more details, please refer to University of California – Policy G-13.