Microsoft Word - 650-31 - Moving-Relocation Expenses for Academic Employees Sept 2019-Final.docx

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Policy Title: Moving and Relocation Expense Reimbursements

for Academic Employees

Policy Number: 650-31

Responsible

Officer:

Associate Vice Chancellor of Business & Financial Services

and Controller

Responsible Office:

Business and Financial Services – Accounting Office

Date of Revision:

09/01/2019

Date of Last

Review:

09/01/2019

Origination Date:

02/01/2008

Scope:

This policy applies to the payment and taxation of Moving

and Relocation expenses for the University’s academic

positions in accordance with Business and Finance Bulletin

G-13 and the Academic Personnel Manual Sections 550,

560 and 561.

Moving and Removal expenses for staff employees are

covered by UCR P&P 650-32.

I. Overview

To attract and retain the most qualified employees, the University on occasion

provides reimbursements for certain moving expenses, depending on the

situation (e.g., new recruitments, transfers), the employee's geographic location,

and availability of funding. New tax laws effective from January 1, 2018 through

December 31, 2025 require the taxation of many of these benefits. Therefore,

based on lessons learned in calendar year 2018, effective January 1, 2019, UCR

will gross up all allowable reimbursements by 30% (up to $3,000) to minimize the

impact of taxable benefits (i.e. imputed income) on these eligible employees’ net

pay.

Business and Finance Bulletin G-13 Policy and Regulations Governing Moving

and Relocation sets forth the University-wide policy governing the payment of

these expenses. This local implementing procedure, 650-31, describes UCR's

transactional processing procedures for moving and relocation of academic

employees.

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II. Eligibility for Moving and Relocation Expense Reimbursements

Refer to the UC Business & Finance Bulletin G-13, APM 550, APM 560, and

APM 561 to determine if an academic employee is eligible for a moving and

relocation expense reimbursement.Payment of relocation expenses is provided

for certain new appointees to academic positions. These payments are not

provided automatically and should not be presumed. Agreement to pay

relocation assistance for academic employees requires pre-approval by the

organizational unit head or next higher level.

III. Allowable Moving and Relocation Expenses

Refer to the UC Business & Finance Bulletin G-13 and Academic Personnel

Manual 550, 560 and 561 for moving and relocation expenses that are allowable

and eligible for reimbursement, as reimbursements can vary depending on the

situation, the employee's position, and availability of funding.

IV. Income Tax Reporting

Amounts paid for moving and relocation expenses from January 1, 2018 through

December 31, 2025, whether or not paid directly to an employee, are includible in

an employee's gross income, subject to withholding of federal income, social

security, and Medicare taxes. Such amounts must be tax coded for reporting on

the employee’s W-2 for moving expense payments through December 31, 2025

under I.R.C. Sections 217(k) and 132(g)(2).3. Not all moving and relocation

expenses are subject to California income tax. Business & Finance Bulletin G-13

should be referred to for determining the tax reporting requirements in

accordance to IRS regulations. Appendix A of this policy outlines the taxability

changes of certain items.

To minimize the impact of these tax changes on net pay of employees offered

moving and relocation assistance, effective January 1, 2019, an additional

payment to the employee (i.e. gross up) of 30% will be applied to all taxable

moving and relocation costs up to a total of $3,000 per employee. The cost of

the 30% gross up will be borne by the employee’s department. In addition,

whenever possible, reimbursements processed after September 1, 2019, will be

paid via the UCPath system.

V. UCR Procedure - Moving and Relocation Expenses

A. Authority to Approve Moving and Relocation Expenses

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The authority to approve academic moving and relocation expense

reimbursements that are in accordance with Business & Finance Bulletin

G-13 has been delegated to the Chancellor; this authority has been re-

delegated to Provost/EVC and Deans for their respective

organization. UCR has instituted a maximum reimbursable moving and

relocation expense amount of $10,000 for academic; taxable moving and

relocation expenses will automatically be grossed up by 30% (not to

exceed $3,000). The employee’s department has the discretion to

recommend reimbursement amounts up to the$10,000 limits to their

respective Dean. The 30% gross up (up to $3,000) will be automatically

applied and is not at the department’s discretion.

The 30% gross up is provided to minimize the impact on an employee’s

net pay; departments should consider the gross up amount when

authorizing moving and relocation benefits to new employees as this

expense will be borne by the department. All reimbursements to the

employee must be specified in writing and will be processed via UCPath,

when possible, so the related taxes can be withheld and reported on the

employee’s W2.

Exceptions: Approval of a reimbursement that is an exception to policy or

exceeds $10,000 must be routed through the respective organization unit

head (e.g. Dean, Vice Chancellor) for approval. The Dean should evaluate

if such exceptional reimbursement is necessary for the recruitment of the

most qualified employees in that particular profession. The request for an

exception should be made in advance in writing and must specify the

purpose, special circumstances, applicable dates, and name of the

individual. Please note exceptions to the gross up amount are not

permitted.

B. Source of Funds/Forms

As a general rule, moving and relocation expense reimbursements for

academic employees are typically recorded and funded on the same

activity, fund, and function as that used to pay the employee's salary. See

APM 550, 560 and 561 for additional restrictions

C. Notifying Employee

After securing the appropriate approvals for moving and relocation costs,

the Hiring Department should inform the employee of the related policies

and limitations at the earliest possible date, preferably in the offer letter

(see sample language in Appendix B). The employee must also be

advised that all family and household moving and relocation expenses are

taxable. Employees can make their own moving and travel arrangements

for themselves and their family members. Reimbursement of allowable

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costs will be made upon submission of an approved Moving and

Relocation Expense Reimbursement form with required receipts. *A list of

moving companies offering UC discounts to employees is available from

Procurement.

When a purchase order is used for relocation expenses, the personal

portion of the move must be clearly separated from the non-taxable

relocation of equipment and property to be transferred to UCR.

D. Reimbursement

Application for reimbursement for moving expenses should be made on

the Moving and Relocation Expense Reimbursement Form (available on

the Accounting Office website). A single Moving and Relocation Expense

Reimbursement form is required to provide a final accounting of the

moving/relocation expenses, initiate reimbursement of related out-of-

pocket costs, and enable proper tax reporting. Employees should submit

reimbursement requests immediately after the move, and approved

requests must be submitted to the Accounting Office within 60 days.

Delinquent request may jeopardize reimbursement.

Original receipts must be supplied for claims of allowable expenses.

Reimbursement requests will be reviewed by Accounts Payable and

payments will be processed in UCPath with the gross up outlined above to

ensure proper tax withholding and reporting.

VI. Feedback and Additional Information

If you have questions or comments on interpreting or applying this procedure,

please contact the Accounting Office.

VII. Other Policy References

 Business and Finance Bulletin G-13, Policy and Regulations governing

Moving and Relocation

 Business and Finance Bulletin G-28, Policy and Regulations governing

Travel

 Academic Personnel Manual, Section 550: Recruitment, Moving

Expenses for Intercampus Transfer

 Academic Personnel Manual, Section 560: Recruitment, Removal

 Expenses/General

 Academic Personnel Manual, Section 561: Recruitment, Removal

Expenses/Assistants

 IRS Publication 521- Moving Expenses

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Appendix A: Taxability

Types of Allowable Expenses (see policy BFB G-13, APM 550, APM560, and APM 561

for specific limitations)

Standard Expense Types:

Taxable Income

Pre-2018

Taxable Income

Effective 1/1/18

Packing, crating and unpacking of household goods and

personal effects

No Yes

Transporting household goods and personal effects by

professional movers

No Yes

Packing, crating, unpacking, and transporting a library,

office or lab that is transferred as UCR property (must be

quoted and invoiced separately from household goods

and library, office or lab items that are NOT considered

UCR property)

No No

Transporting household goods and personal effects by

rental truck; fuel may be claimed separately

No Yes

Insurance of household goods and personal effects while

in transit

No Yes

Driving or shipping up to two personal vehicles No Yes

One-way economy/coach class airfare for all household

members

No Yes

One time ground transportation from former residence to

the airport and from the airport to the new residence or

temporary lodging

No Yes

Rental car if personal vehicle is shipped Yes Yes

If driving, lodging while en route, up to the daily CONUS

lodging limit

No Yes

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Meals for all household members while en route, up to

daily CONUS M&IE limit per (this is not a per diem)

Yes Yes

Furnished temporary lodging and meals for up to 30

days, not to exceed daily CONUS limits

Yes Yes

Storage of household goods and personal effects for up

to 30 days (90 days for SMG) after removal from prior

residence

Yes Yes

Connecting and disconnecting utilities, excluding

deposits

Yes Yes

Non-standard Expenses Requiring Approval from the

designated Organization Head or next higher level

(regardless of the dollar amount):

Taxable Income

Pre-2018

Taxable Income

Effective 1/1/18

Packing, crating, unpacking, and transporting a library,

office or lab that is NOT University property

 Must be quoted and invoiced separately from transfer

of university property

No Yes

Relocation services, e.g., home search assistance Yes Yes

House-hunting trip Yes Yes

SMG only: Up to two return trips to former residence to

help with the move

Yes Yes

Selling costs within policy limits directly associated with

the sale of the former residence

Yes Yes

Lease settlement costs within policy limits Yes Yes

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Appendix B: Proposed Language to Insert on Academic Position Offer Letter When

Moving and Relocation are Included:

The University will pay the allowable expenses for moving and relocation expenses

associated with your household goods and professional items (e.g. library, laboratory,

office materials) to the Riverside area (this designation is within 90 miles of the

campus), if the conditions of Campus Policy 650-31 and IRS Publication 521, Moving

Expenses are met, up to a maximum of [$X,000]. For example, the University will

reimburse expenses incurred in moving your dependents to the Riverside area via air

coach, automobile, or other means of transportation, up to the equivalent of the most

economical air coach fare. The Department can arrange for the hire of a moving

company when you have determined the time and place of your move.

Please note certain expenses paid by the university related to your moving/relocation

must be reported on your W2 as a taxable fringe benefit and are subject to federal tax

withholding. To assist with the tax burden, the University will provide and additional

payment of 30% [up to $XXX] based on the actual eligible moving and relocation costs.

You are strongly encouraged to consult with your personal tax advisor. For more

information, please refer to: UC Business and Finance Bulletin G-13

(https://policy.ucop.edu/doc/3420347/BFB-G-13), UCR Policy & Procedure 650-31, and

IRS Publication 521 (https://www.irs.gov/newsroom/tax-reform-brings-changes-to-

qualified-moving-expenses)