Subject: Moving expenses
Date: Mon, 25 Sep 2000
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.
SJ in OR
Date: 11 Oct 2000
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.
IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised
that any written tax advice contained on this website was
not written or intended to be used (and cannot be used) by any
taxpayer for the purpose of avoiding penalties that may be
imposed under the U.S. Internal Revenue Code.