The Tax Cuts and Jobs Act has suspended the exemption for certain reimbursements of moving expenses and the deduction allowed for non-reimbursed expenses.
Prior Moving Expenses Law
Through December 31, 2017
Under pre-Act law, employees could exclude qualified moving expense reimbursements from their gross income and from their wages. These were any amount received (directly or indirectly) from an employer as payment for (or reimbursement of) expenses which would be deductible as moving expenses.
Taxpayers not reimbursed could claim a deduction expenses incurred in connection with starting a new job if the new workplace was at least 50 miles farther from a taxpayer’s former residence than the former place of work.
New Moving Expenses Law
Effective for tax years beginning after December 31, 2017
The exclusion for qualified moving expense reimbursements is suspended, except for members of the Armed Forces on active duty (and their spouses and dependents) who move pursuant to a military order and incident to a permanent change of station.
The deduction for moving expenses is also suspended, except for members of the Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station.
Commentary
Although this exclusion/deduction was not used by many taxpayers, it was used by those moving to offset some costs of moving. It was also used as a way to entice a new employer. The new employer can still offer this as a benefit, but it will need to be added to wages as additional compensation. Please contact us with any questions you might have.
