Stay up to date
Subscribe to the blog for the latest updates
4. If a company pays for moving expenses on behalf of the employee, are those expenses still considered taxable?
Yes! It is a common misconception that only lump sums (aka cash) are considered taxable income. All relocation benefits, no matter how they are paid (reimbursed, cash disbursement, direct billed) are considered taxable income with the exception of some corporate real estate programs. Even if the company pays for a moving company or hotel on the employee’s behalf, this is still considered income to the employee, and therefore, taxable.
5. If a company reimburses employees for their moving expenses are those expenses still considered taxable?
Yes! The reimbursement of relocation expenses are still considered taxable income to the employee. If your company has an expense reimbursement program in place to cover relocation expenses, you must decide whether those expenses will be grossed up.
6. Are relocation lump sums considered taxable income?
Yes. Lump sums, also called cash or relocation bonuses, are considered taxable income to the employee. If the company does not gross up the total dollar amount, taxes must be withheld from the gross amount.