Transition Relocation Allowance (formerly Moving Expenses) (Updated November, 2018)
Beginning in January, 2018, the Internal Revenue Service determined that all employee transition relocation allowances and/or third party moving expenses are subject to Federal and State taxes. All such payments made to an employee will be reported on the employee’s Form W-2. The payment of transition relocation allowances and/or third party moving expenses for faculty and staff members from department current expenditure funds may be authorized to the extent that funds are available and approved in advance by the appropriate department head. Additional approval by the Principal Investigator is required when appointee’s expenses are to be paid from a grant or contract.
A. Payment of Transition Relocation Allowance
The transition allowance will be paid through the payroll system as taxable compensation and taxes will be withheld. Send the payment request with authorization as stated above via email to hrequest [at] admin.umass.edu or via memo to 325 Whitmore Attn: Sandi White. Indicate Transition Relocation Allowance (MNQ) in the subject line and include the employee name, employee ID, amount to be paid, and speed type in the message.
B. Payment of Third Party Moving Expense
Any payments made directly to a third party moving vendor are allowable and shall be made in accordance with procedures outlined in the Amherst Procurement Contract Policy. An amount equal to any third party moving vendor payments made on behalf of the employee will be added to the employee’s reported salary on Form W-2. Salary for ‘tax reporting only”, equal to the amount made directly to a third party moving vendor on behalf of an employee are added to the employee’s taxable gross income so that appropriate taxes can be withheld. No “pay” is added to the employee’s paycheck. As a result, the employee’s net pay will be decreased by the additional withholdings from adding ‘tax reporting only’ salary to the employee’s taxable gross income. Packaging/Shipping of household goods (personal effects and property) paid by the University to a moving company should be requested on a standard purchase order form and charged to account code 761590. The MHEC Interstate Moving Contract must be used for contracting with movers for payments made directly to a company.