FI0450 – Moving Allowance
To provide guidelines on the payment of a moving allowance for newly hired faculty and staff members.
The university may provide a moving allowance for a newly hired faculty or staff member to move from their former residence to their new residence. To be eligible to receive a moving allowance and to comply with the current guidelines published by the Internal Revenue Service (IRS), the move of the residence must meet the minimum IRS distance test of 50 miles from the location of the former residence. For example, if the location of the former main workplace was three miles from the employee's former home, the location of the employee's new main workplace must be at least 53 miles from the employee's former home.
- In accordance with IRS regulations, the moving allowance will be reported as taxable income and included on the employee's W-2 statement at the end of the year. The IRS also requires applicable taxes to be withheld and reported. The employee may be able to recover the income tax withheld by filing the appropriate IRS forms with their tax return. This recovery is dependent on the IRS regulation in force at the time of the payment. The individual receiving the moving allowance will be responsible for documenting expenses on their federal tax return as required by IRS publication 521 - Moving Expenses. More information regarding this publication can be located at IRS.gov.
Prior to processing a moving allowance for a new employee, Form T-5 - Moving Expense Allowance Request Form must be completed. The form will assist departments in calculating the net moving allowance that will be paid to the employee after applicable taxes are withheld. Questions regarding these guidelines should be directed to the Treasurer's Office.
A document indicating the amount of the allowance and acceptance by the employee must be attached to the T-5 (This is typically the employment offer letter.) Both of these documents must be attached to the IRIS transaction (ZAP_Entry) and will be routed in IRIS to the chancellor/vice president or their designee for approval. The allowance will not be processed more than 60 days prior to the employees start date and requests for December allowances must be received by the first week in December to allow for correct tax treatment. The moving allowance can not exceed the amount in the document (offer letter) attached to the T-5. Departments should not process more than one moving allowance per employee and all relocation costs should be included in the moving allowance. Relocation expenses include the costs associated with house hunting trips, moving of household items and any temporary housing. These expenses should not be processed separately through travel reimbursement or accounts payable. Failure to properly process these expenses with the moving allowance request will result in delays in processing the request and may result in the improper tax treatment of these expenses.
Allowances exceeding $35,000 require advanced approval from the University's Chief Financial Officer.
Exceptions to this policy require the approval of the campus/institute business officer or designee and the chief financial officer or designee.
|Health Science Center:||http://www.uthsc.edu/policies/w932_document_list.php?app=FSC|
|Institute of Agriculture:||https://ag.tennessee.edu/Pages/UTIApolicies.aspx|
Cindy Stockdale (865) 974-3086 firstname.lastname@example.org