MOVING EXPENSE PROGRAM

Transcription

1 MOVING EXPENSE PROGRAM A. Scope The University of St. Thomas provides certain assistance to eligible new hires that are relocating to join the university. These individuals will receive financial benefits in accordance with the terms of this policy. The employees that are eligible to receive these benefits include full-time faculty and full-time management-level exempt employees. This policy does not cover visiting faculty, or entrylevel, non-exempt, part-time, and temporary staff. This policy meets the requirements of an IRS accountable plan. B. Policy Statement The decision to provide financial benefits for relocation to a new employee must be made at the time of hiring and approved by the appropriate vice president. This benefit will be part of the total package of compensation offered to the incoming employee. The financial benefit allowed under this policy is up to $5,000 of documented expenses. The benefits may be used by the incoming employee for any of the following reasons: Reimbursable and Nontaxable: a) Shipping of household goods and personal effects from the former residence to the new residence b) Charges for packing and crating of household goods at the former residence and unpacking and installation of the household goods at the new location (self-labor charges are not reimbursable) c) Transportation of the employee and his/her family at the time of the move d) Driving or shipping of up to two employee automobiles from the former residence to the new residence e) Storage and insurance of household goods and personal effects while in transit for up to thirty (30) consecutive days Reimbursable and Taxable: f) Meals consumed while traveling during move g) Expenses for one house-hunting trip for the employee and spouse h) Temporary living expense following the relocation before suitable housing has been located. This program will not pay for the following expenses: a) Airfare exceeding coach class or transportation through an indirect route b) Additional charges to cover moving costs for airplanes, boats, recreational vehicles, vacation trailers, motorcycles, snowmobiles, dog houses, playhouses, swing-sets,

2 swimming pools, hot tubs, farm equipment, firewood, storage sheds, construction materials, satellite antennas and dishes, propane tanks, hazardous material, vegetation/live plants, and animals (except household pets) c) Additional charges to cover disassembly or re-assembly of children s playhouses or swing sets, portable swimming pools, waterbeds, utility sheds, fencing, or items of a similar nature d) The costs of selling (or settling an unexpired lease on) the old residence and buying (or acquiring a lease on) the new residence e) Expenses incurred by persons not considered to be dependents for tax purposes f) Any services in connection with packing, shipping, or moving performed by the new employee, dependents, relatives, or friends (self-labor charges) g) Additional charges for meals and travel costs incurred by laborers; h) Personal telephone calls, movies, or other entertainment i) Housecleaning or maid service at either the old or new home j) Tips or other gifts to the moving company s employees and other laborers. Employees must submit a request for reimbursement of moving expenses within six months of their original hire date. The employee must submit a written request to the Controller s Office (Mail AQU219) to extend this period up to an additional six months. Cash advances are not available for moving expenses. C. Procedures 1. The Agreement All moving expenses to be reimbursed must be negotiated and agreed upon during the employment offer. The amount of moving expenses agreed upon may not exceed the maximum benefit provided in this program under Section B. A Moving Expense Reimbursement Agreement must be completed and signed as follows: For faculty, the Administrative Assistant to the Executive Vice President/Chief Academic Officer will complete the agreement. The Associate Vice President of Academic Affairs must approve and sign the agreement. For non-faculty, the hiring supervisor will complete the agreement. The Associate Vice President of Human Resources must approve and sign the agreement. A copy of this agreement, after the signatures have been obtained, must be forwarded to the Controller s Office (Mail AQU219). The Controller s Office will send the new employee a letter indicating the amount of moving expenses agreed upon, a copy of these policies and procedures, information on the university s contracted movers, and Moving Expense Reimbursement Forms. 2. The Request Process University Contracted Commercial Movers The University of St. Thomas offers two contracted suppliers for moves. Information on these suppliers will be sent to the new employee after the Moving Expense Reimbursement Agreement has been approved. The new employee may 2

3 choose either supplier or a different commercial mover of his or her choice (see below). If the employee chooses one of the university contracted commercial movers, the university will pay the moving company directly. If the new employee chooses a university contracted mover, an electronic copy of the estimate should be forwarded to the Controller s Office. The from the new employee should indicate their authorization to use the university mover based on the estimate attached. As an alternative, the new employee may complete the Moving Expense Reimbursement Request, answer questions 1 and 2 on the request and submit an estimate from the mover. The Request should be signed by the employee and forwarded with the estimate to the Controller s Office at AQU219. After the move has occurred, the Controller s Office will receive the invoice directly from the university contracted moving company. A copy of the invoice will be forwarded to the new employee for review. Any issues with the move or invoice should be noted by the new employee at that time. Upon employee approval, the invoice will be submitted to Accounts Payable for payment. The employee may provide copies of their final paperwork (a copy of the Bill of Lading and any other paperwork provided by the mover) to the Controller s Office at AQU219. Non-university Contracted Commercial Movers A new employee may choose to use a commercial mover other than the university movers. In such cases, the new employee must work with the outside moving company directly and pay the moving company directly. The new employee should then complete a Moving Expense Reimbursement Request to seek reimbursement. The form should be signed and forwarded with original receipts to the Controller s Office at AQU219. Reimbursed Moving Expenses - A new employee should complete a Moving Expense Reimbursement Request for any other moving expenses reimbursable by the university under this program and within their approved amount. The new employee must sign the form and forward it to the Controller s Office at AQU219. New employees must substantiate all moving expense reimbursement requests with original detailed receipts. Expenses not properly substantiated are considered taxable income and are subject to appropriate withholding and reporting. 3. The Payment Process Moving Expenses - The Controller s Office reviews the Moving Expense Reimbursement Request and any tax consequences are determined. (The new employee should review the tax considerations laid out below prior to sending in the reimbursement request.) If the request is for payment directly to a university-contracted commercial moving company, the university will authorize the moving company to send the invoice directly to the university for payment. When the university pays a university-contracted commercial mover, the university will pay the moving company the total cost of the moving expenses. If such amount exceeds the agreed maximum amount of moving expenses to be reimbursed, the Controller s Office will contact the new employee to arrange reimbursement to the university. A new employee should be prepared to provide a check to the university for the excess amount within 15 days of the university s payment. 3

4 If the request is for reimbursement, the payment will be made through the payroll process. A new employee must have completed his or her New Hire Paperwork, including the Form I-9, in order for the payroll process to work smoothly and timely. Appropriate tax withholding and reporting will take place as necessary on any taxable reimbursements. D. Tax Considerations Certain moving-expense reimbursements made to an employee or on an employee s behalf are considered non-taxable. Other moving-expense reimbursements are taxable income and must be reported on the employee s Form W-2. For taxable reimbursements, federal and state income taxes and social security and Medicare taxes must be withheld. The general rules pertaining to the taxation of reimbursed moving expenses are laid out below. This section is not intended to provide any tax advice. Employees should consult their tax advisors as to the tax implications of receiving reimbursed moving expenses. 1. Distance Test IRS regulations require the distance between the old home and the new place of work to be at least 50 miles greater than the distance between the old home and old place of work. If the distance test is not met, moving reimbursement will be reported as taxable income subject to the applicable tax withholding and reporting. 2. Time Tests An employee s move must be closely related in time to the start of work at the University of St. Thomas. The IRS generally considers moving expenses incurred within one year from the date you first reported to work at the university as closely related in time to the start of work. If a new employee does not move within one year of the date he or she begins work, any reimbursement of moving expenses generally is taxable unless the employee can show that circumstances existed that prevented the move within that time. In addition, an employee must work full time for at least 39 weeks during the first 12 months after he or she moves. This test is the employee s obligation to monitor. The University of St. Thomas will not monitor this test, as an employee does not have to work for the same employer for the 39 weeks. However, new employees should be aware of the rule and when appropriate, should check with their tax advisor of the consequences of not meeting this time test. 3. Qualified Moving Expenses The following moving expenses (qualified moving expenses) are not subject to taxation: Moving household goods and personal effects from the former residence to the new residence, including the cost of packing, crating, and transporting goods (not self-labor charges) Traveling, including lodging, from the former residence to the new place of residence 4

5 Where an automobile is used in making the move, you may request reimbursement for a standard mileage allowance in accordance with the IRS moving expense guidelines (23 cents per mile in 2015). UST will report the qualified moving expense payments made to you in Box 12 of your Form W-2, using code P. These reimbursements will not be included in taxable income nor are subject to withholding. 4. Nonqualified Moving Expenses The following expenses (nonqualified moving expenses), if reimbursed, will be taxable to you: The cost of meals consumed while traveling and while living in temporary quarters near the new workplace The cost of one pre-move house-hunting trip The cost of temporary living expenses UST will include the nonqualified moving expense payments as wages and will report them in Box 1 of your Form W-2. These payments are subject to income tax withholding and social security and Medicare taxes. E. Exceptions The Vice President of Business Affairs and CFO of the University of St. Thomas must approve any exceptions to this policy. F. Contact Information If the new employee has any questions on the payment process or the tax withholding and reporting, please contact Steven Kim of the Controller s Office at kim60116@stthomas.edu or