Faculty Moving Expense Guideline
(Updated August 2009)
Moving Expense Reimbursement is defined in the Payroll & Benefits Procedures Guide sections. This explanation is condensed from that policy.
If your department uses a Financial Service Center (FSC), route all moving expense submissions through them. Following review from the Budget Office the request will be forwarded to either Academic Affairs or Graduate/Research School for approval and further forwarded to PBS for processing.
I. Methods of Payment for Employee Moving Expense
Eligible employees may choose to pay moving expenses with personal funds and then get reimbursed through the payroll process (Time Collection) or have the University pay a third party directly (a moving company) through Procurement.
If the employee chooses to have the University pay the moving company directly, information on how to process this request is available from the Procurement Service Center - Purchasing Services guidelines called "How to Buy Moving Services", located at https://www.cu.edu/psc/departments/commodities/downloads/Moving.pdf.
- If the University directly pays for house-hunting expenses, this form must be submitted to PBS: https://www.cu.edu/pbs/forms/downloads/PreMove-House-Hunting.xls. (Updated January 2009)
This document is focused on reimbursing moving expenses paid originally with personal funds.
Moving expense reimbursement, if provided for in the letter of offer, is allowed up to the amount stated in the offer letter. In order for an employee's moving expenses to be eligible for reimbursement, the following conditions must be met:
- Distance Test: This requirement will be met if the distance from the previous home to the new work location is at least 50 miles farther than the previous home to the previous work location.
- Time Test: This requirement will be met if the employee works full-time for at least 39 weeks during the first 12-month period. An academic year appointment satisfies this test.
- Itemized original receipts must be submitted and retained in the A&S Budget Office to establish proper substantiation of moving expenses.
The employee must submit original receipts within 60 days of expense incurred in order for non-taxable items to be non-taxable. Any expense reimbursement requests filed more than 60 days after expenses are incurred will be taxed as regular income.
The Budget Office will review the requested funding compared to the offer letter (if faculty). If the reimbursement is for a Research Associate or Graduate student, then it will be necessary to obtain an offer letter from the requesting department.
The Budget Office will review all receipts to ensure that they are classified appropriately as MVN, MVT or pre-move. All receipts will be checked to ensure that the new hire's name is on the receipt. If another name is on the receipt then it will be necessary to work with the department to obtain documentation explaining the relationship to the new hire (i.e. husband). A helpful reference is IRS Publication 521 "Moving Expenses" (http://www.irs.gov/pub/irs-pdf/p521.pdf).
II. General Moving Expenses Taxable/Nontaxable
Unless the letter of offer stipulates certain limitations by category, any combination of expenses listed below can be reimbursed up to the amount provided in the offer letter:
General Moving Expense: Non-Taxable
- Travel by car
- Travel by car can be reimbursed either with actual gas and oil costs or by mileage, in addition to parking fees and tolls.
- If the employee chooses to be reimbursed by mileage, no receipts will be required. Sufficient documentation of mileage will be required. The year 2009 reimbursement rates are:
- State Allowable Rate = $.50/mile.
- Non-Taxable Rate (MVN) = $.24/mile
- Taxable Rate (MVT) = $.26/mile
- Transportation of household goods and personal effects.
- Packing and crating of the eligible employee's household goods.
- Travel for the eligible employee and immediate family members from the former residence to the new residence is allowed for a single trip.
- Lodging expenses incurred during moving.
- Storage of and insurance on eligible employee's household goods and personal effects while in transit, if costs are incurred within any consecutive thirty (30) day period after removal of the household goods from the old residence and before delivery to the new residence.
- Disconnecting and connecting of utilities.
- For eligible faculty, transportation of laboratory or special equipment from the former residence or place of work to the new residence or place of work.
- Driving or shipping of up to two eligible employee automobiles from the former residence to the new residence.
- Transportation of domestic pets.
General Moving Expense: Taxable
- Meals in transit.
- Travel by car, if mileage reimbursement is claimed, the taxable portion rate (see rates above).
- House-hunting trips for the eligible employee and spouse. Expenses for two such trips may be reimbursed.
- Temporary living expense for the eligible employees (meals and lodging only) while occupying temporary quarters in the area of the new work place, during any one period of thirty (30) consecutive days after approval of employment.
Note: The above taxable and non-taxable items only provide general guidelines. All eligible employees being offered moving expense reimbursement should consult their tax advisor to determine the full tax implication of these reimbursements.
III. Processing Moving Expenses
The eligible employee is responsible for submitting original receipts to the department office manager to request moving expense reimbursement. The office manager or FSC staff will:
- Review original receipts.
- Determine taxable and nontaxable expenses and report them on the Moving Reimbursement Expense worksheets, MVN (non-taxable) and/or MVT (taxable) form. The worksheets are available on the PBS website:
- Complete the Additional Pay form (https://www.cusys.edu/pbs/forms/downloads/Additional-Pay.pdf)
Note: If the College is funding the move, then leave the speedtype box blank as it will be entered once received by the Budget Office. If the Department is funding the move, specify what departmentsŐ speed type will incur the cost.
- If a Handrawn Warrant is requested for the reimbursement, do not create a One-Time-Payment on-line batch in PeopleSoft HR. It is preferred to process moving reimbursements with a Hand-Drawn Warrant .
- If a Handrawn Warrant is not requested, an on-line One-Time-Payment in PeopleSoft HR needs to be created and put in "Ready" status. The Batch ID MUST be noted on the Additional Pay form. Faculty Affairs will do on-line approval for the One-Time-Payment batch.
Resources:
Payroll & Benefits Procedure Guide: https://www.cusys.edu/pbs/proceduresguide/.
IRS Publication 521, Moving Expenses: http://www.irs.gov/pub/irs-pdf/p521.pdf.
Q&As
- One of our new faculty incurred moving expenses in March 2008, but his official appointment starts in August 2008. According to 60 days rule, will all his reimbursement be taxable if he files the request in August?
- Answer: No. Since it requires an employee ID to process a One-Time payment in our system, the University can not process the reimbursement until the faculty becomes officially employed. According to one PBS counselor, for this particular case, the official employment date can be used in the 60 days "safe harbor" rule. That means that if the faculty submits original receipts within 60 days of his (her) official employment start date, non-taxable items will be treated as non-taxable.
- I understand that all the names on the original receipts should match the eligible employee's name. Occasionally, the eligible employee's spouse's name will show on the receipts. What should I do?
- Answer: We need a statement signed by the employee stating that the person on the receipt is his/her legal spouse. This will help us substantiate the reimbursement.
- Who funds eligible employee moving expenses?
- Answer: In the offer letter, it normally specifies the dollar amount and the party that will cover the moving expense. Moving Reimbursements will be processed according to the offer letter. If the department would like to use discretionary funds to cover the extra portion which is not specified in the offer letter, approval in writing from the Department Chair is required. If the faculty would like to use his/her startup funds, both Associate Dean and Chair's approvals in writing are required.
