Are the moving expenses I was reimbursed treated as income?

October 16, 2000

Subject:  Moving expenses
Date:  Mon, 25 Sep 2000
From:  SJ

Mike,

Maybe you can help,

My friend just moved from Toronto, Canada, he submitted all his moving expenses to his new employer but the employer paid him after withholding the taxes, is this treated as an income or as reimbursement for the expense involved with moving.

Kindly advise
SJ in OR

Answer

Date:  11 Oct 2000

Hello SJ,

You and your friend should get a copy of IRS Publication 521 from the IRS web site or at a local IRS office.

You can find a link on our links page.

If the reimbursement is for moving expenses that would qualify for a deduction by the employee, no withholding is required and the payment is tax exempt for the employee.

If the employee could not otherwise deduct the expenses, the reimbursement is taxable and subject to withholding.

Good luck!
Mike Gray

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