How do you determine if expenses are considered “moving/relocation expenses”?
There are three requirements that need to be satisfied for expenses to be considered relocation/moving expenses:
- The move is closely related to the start of work - this means that generally the moving expenses must be incurred within one year from the date you first reported to work at the new location.
- The distance test is met - your move will meet the distance test if your new main job location is at least 50 miles farther from your former home than your old main job location was from your former home.
- The time test is met - you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location.
Are all relocation costs taxed in the same way?
No. Qualified costs are taxable by the state and not federal taxable, while non-qualified costs are taxable by both state and federal.
What types of relocation/moving expenses are considered “qualified” moving expenses?
Qualified relocation/moving expenses consist of the following types of expenses:
1. Transportation of household goods/personal effects
- This includes all reasonable expense incurred in packing and moving household goods and personal effects to the new residence.
- Storing and insuring goods within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home.
- If you use your personal car to take yourself, members of the household or your personal effects to your new home, you can figure your expenses by actual expenses incurred (gas, parking, tolls) or the IRS standard mileage rate for moving.
- Costs of connecting or disconnecting utilities required because you are moving your household goods, appliances or personal effects.
- Cost of shipping your car and your household pets to your new home.
- Cost of moving your household goods/personal effects from a place other than your former home. The amount is limited to what the cost would have been to move them from your former home.
- Cost of transportation and lodging (but not meals) for yourself and members of your household while traveling from your former home to your new home.
What is the standard mileage rate used for moving expenses when transporting yourself, members of the household or your personal effects using your personal car to your new home?
The IRS annually announces the standard mileage rates for business, medical, moving and charitable expenses. Please note that the standard mileage rate for moving/relocation expenses is different (and lower) than the business rate. See the standard mileage rates.
What object code should “qualified” relocation/moving expenses be charged to?
OC 81618 - Relocation State Taxable
What types of relocation/moving expenses are considered “non-qualified” moving expenses?
- Cost of meals while traveling from the old home to the new home
- Pre-move house hunting expenses
- Temporary living expenses after starting work in the new work location
- Qualified real estate expenses
- Any part of the purchase price of your new home
- Car tags, driver's license
- Expenses of buying or selling a home (including closing costs, mortgage fees and points)
- Expenses of entering into or breaking a lease
- Home improvements to help sell your home
- Loss on the sale of your home
- Losses from disposing of memberships in clubs
- Mortgage penalties
- Refitting of carpet and draperies
- Return trips to your former residence
- Security deposits (including any given up due to the move)
- Storage charges - except those incurred in transit
- Any other miscellaneous charges or expense incurred as a result of relocation/move.
What object code should “non-qualified” relocation/moving expenses be charged to?
OC 81616 - Relocation Federal and State Taxable
Who determines what types of relocation/moving expenses Carnegie Mellon will pay for or reimburse?
It is the department's discretion to determine what types of relocation/moving expenses can be paid for or reimbursed.
Is there a limitation on the amount of relocation/moving expenses Carnegie Mellon will pay for or reimburse?
It is the department's discretion to determine if there is a dollar limit on the amount of relocation/moving expenses that can be paid for or reimbursed.
What IRS resource is available for individuals incurring relocation/moving expenses?
CMU Ethics Reporting Hotline
www.reportit.net (Username: tartans; Password: plaid)