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Viewing: 1270 - Policy on Employee Moving Expense Reimbursements

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Current Status: Active PolicyStat ID: 5496020

1270 - Policy on Employee Moving Expense Reimbursements

Purpose

The University of North Carolina at Chapel Hill Policy on Employee Moving Expense Reimbursements is to clarify the regulations for moving expense reimbursements. Due to legislation changes in the 2017 Tax Cuts and Jobs Act which reinstated personal moving expense reimbursements as taxable wages, the University policy and procedure have been updated.

Scope of Applicability

This policy applies to departments who are engaging in the recruitment of highly qualified and/or highly recruited individuals and the payment made to relocate the individual for employment.

Policy Statement

A moving expense payment may be issued to a new permanent employee if the employing department considers the expense necessary to employ a highly qualified and/or highly recruited individual. The University will reimburse actual and reasonable moving expenses from the employee’s prior residence to new residence. The University continues to reference IRS publication 521 (2017 edition) when considering what is a reasonable moving expense unless it is explicitly mentioned in this policy. Reasonable moving expenses, up to a limit of packing, transporting, and unpacking a maximum of 15,000 pounds, include the moving of household goods and personal effects (including in-transit or foreign-move storage expenses), and traveling to the new home. This includes lodging and meals. The reimbursement of the move should occur within 6 months of the first date of employment.

Due to legislation changes in the 2017 Tax Cuts and Jobs Act which reinstated personal moving expense payments as taxable wages, the University is no longer issuing direct payments to vendors for moving expenses. Departments should increase the reimbursement of actual moving expenses by 30% to mitigate the tax impact to the employee.

The University continues to reimburse house hunting expenses and temporary housing expenses when agreed to in the employee's offer letter. No increase percentage is provided on house hunting and temporary housing expenses.

Related Requirements

University Standards and Procedures

The Office of Human Resources policy on Non-Salary & Deferred Compensation: https://unc.policystat.com/policy/5066676/latest/

Special Situations

Moving expenses are not reimbursable from State funds.

Moving expenses cannot be paid from Sponsored Research funds unless specifically allowed by the granting agency.

Exception Requests

Clarifications on the policy and reasonable moving expenses should be directed to Payroll Services.

Compensation related exception requests should be rare and receive prior approval from the Academic Personnel Office for faculty members and the Office of Human Resources for other employees.

Procedures

  • 1270.1 - University of North Carolina at Chapel Hill Procedure for Employee Moving Expense Reimbursements

Additional Information

Frequently Asked Questions

Q: May the department reimburse a SPA employee for moving expenses?

A: Yes, if the employee has a specialized skill that is necessary to the department's function.

 

Q: Why are taxes withheld from moving expense reimbursements and why are the taxes so much?

A: Effective January 1, 2018, the Tax Cuts and Jobs Act reinstated moving expense reimbursements as taxable events. The University is increasing the reimbursement by 30% to help defray the tax burden. Even with this 30% increase, the original reimbursement request and net payment can be significantly different. For example:

  • Employee A has a monthly salary or gross pay of $5,000. In addition, Employee A will receive a moving expense reimbursement of $5,000, plus 30% ($1,500) this month for a total payment of $11,500. The term "net pay" used below is the gross amount less deductions and tax withholdings. The net amount is how much an employee receives through direct deposit.
    • Gross pay prior to the addition of a moving expense reimbursement: $5,000
    • Net pay prior to the addition of a moving expense reimbursement: $4,000
    • Reimbursement amount plus 30% increase: $6,500
    • Gross pay after the addition of a moving expense reimbursement: $11,500
    • Net Pay after the addition of a moving expense reimbursement: $7,800

Because of the tax impact, the employee netted $3,800 of the $5,000 original expense.

 

Q: IRS publication 521 (2017 edition) mentions non-deductible expenses, can those now be reimbursed?

A: Unless explicitly stated in the policy above, non-deductible expenses should be considered non-reimbursable.

 

Q: Can an employee be reimbursed for the purchase of personal property?

A: No, an employee cannot be reimbursed for the purchase of personal property. Customary moving consumables such as boxes, tape, and packing paper can be reimbursed.

 

Q: May any fund source be used to pay for moving expenses?

A: Not all fund sources may be used to pay for moving expenses as indicated below.

  • Appropriated State Funds and Receipts-Supported State Funds – Moving expenses for new employees may not be paid from State Funds.
  • Facilities and Administrative Receipts – Moving expenses may be paid for faculty and research staff only.
  • Sponsored Research Awards – Moving expenses for new employees may not be paid unless specified in the contact or grant award.
  • Trust Funds (Gifts, Endowment Income, Investment Income) – Moving expenses may be paid as consistent with the fund authority.
  • Internal Service Funds (Recharge Centers) – Moving expenses for new employees may not be paid.
  • Student and Institutional Auxiliaries and Health Care Clinics – Moving expenses may be paid as consistent with the fund authority.

 

Q: Should business related moves, such as moving a research lab, follow this process?

A: This policy only covers employee household moves. Please use campus vouchers to process business related moves. Contact Accounts Payable at accountspayable@unc.edu with questions about this move. Concurrent business and personal moves should be handled via separate contracts since the personal move is fully taxable and the business move is not considered taxable income.

Related Data

State of North Carolina Budget Manual - Section 6.6

Contacts

Policy Contact

Payroll Services                               919-962-0047           payroll@unc.edu

Other Contacts

Academic Personnel Office           919 962-1091

Office of Human Resources          919 843-2300                hr@unc.edu

History

Revised:

May 24, 2018: Policy updated due to 2017 Tax Cuts and Jobs Act.
April 20, 2018: Updated Disbursement Services to Accounts Payable and updated email.
September 27, 2017: Added question to FAQs re: denial of payments to temporary employees for moving expenses.
March 19, 2013: Revised response in Frequently Asked Questions regarding moving mileage.
December 10, 2010

All revision dates: 11/8/2018, 6/22/2018, 4/20/2018, 2/28/2018, 9/27/2017, 3/19/2013, 12/10/2010
Attachments:

Approval Signatures

Step Description Approver Date
Publication Matthew Teal: University Program Specialist 11/8/2018
University Policy Review Committee Jennifer DeNeal: Administrative Director 11/8/2018
Finance Policy and Communication Subcommittee Janet Kelly-Scholle: Associate Director 11/8/2018
Payroll Director Walter Miller: Director of Payroll Services 11/6/2018
Payroll Manager Stephanie Kidd: Payroll Manager 10/26/2018
Older Version Approval Signatures
Step Description Approver Date
Publication Matthew Teal: University Program Specialist 11/8/2018
University Policy Review Committee Jennifer DeNeal: Administrative Director 11/8/2018
Finance Policy and Communication Subcommittee Janet Kelly-Scholle: Associate Director 11/8/2018
Payroll Director Walter Miller: Director of Payroll Services 11/6/2018
Payroll Manager Stephanie Kidd: Payroll Manager 10/26/2018
Older Version Approval Signatures
Publication Matthew Teal: University Program Specialist 6/22/2018
University Policy Review Committee Jennifer DeNeal: Administrative Director 6/22/2018
Finance Policy and Communication Subcommittee Janet Kelly-Scholle: Associate Director 6/21/2018
Payroll Director Walter Miller: Director of Payroll Services 6/21/2018
Payroll Manager Stephanie Kidd: Payroll Manager 6/21/2018
Publication by Office of Ethics and Policy Matthew Teal: University Program Specialist 4/20/2018
Finance Communications Office Christine Shia: Public Comm Specialist 4/20/2018
Bernard Law: Dir. Purchasing Services [AD] 2/28/2018