Step by Step
- Learn the Basics »
- Determine Eligibility of Employee »
- Learn about Reimbursement Limitations »
- Learn about IRS Reporting »
- Learn about Early Employee Termination »
Step by Step
Purpose of Moving and Relocation Policy
The intent of the VCU Moving and Relocation Policy is to provide the University general rules, guidelines, and specific limitations when reimbursing personnel for relocating their household to accommodate the Commonwealth. The regulations are to assist in moving and relocating employees, their families, household goods and personal effects from a primary residence to a new work location as expeditiously as possible and at a fair and reasonable cost to the University.
University management should take necessary steps that all reimbursements are thoroughly documented and reviewed in every case before being approved for payment. The responsible Authorized Approver must approve the offer of reimbursement for Moving & Relocation expenses before the offer is formally made to the employee or any expenses are reimbursed. If the Authorized Approver is unavailable or the position for which the Moving & Relocation is being approved is at or above the Authorized Approver, approvals must move up the chain of command, not down. Any signatures on University documents must be originals or electronic; an individual signing another person’s name and initialing it is unacceptable, as is anyone using another person’s electronic ID and password. The use of signature stamps is specifically prohibited.
These regulations apply to University employees, except employees who do not qualify for moving and relocation reimbursement, such as those paid on an hourly or daily basis and others specifically exempt by Order of the Governor or by Acts of the General Assembly. In instances where an exemption exists, documentation of this exemption should accompany the request for reimbursement.
Moving and relocation expenses can be paid on a reimbursement basis only with the exception of payments to the common carrier and/or up to thirty (30) days temporary storage. All reimbursements, except common carrier or temporary storage, must be processed through the Payroll office. Reimbursements through other processes, such as the petty cash reimbursement process, are not allowed.
If a department elects to provide Moving & Relocation reimbursement, it must do so within the maximum limitations and restrictions provided herein. No department is required by these regulations to provide such reimbursement for Moving & Relocation expenses, and may restrict the amount provided to a lesser sum than the maximum allowed, either in total or by category. Due to financial and fiscal constraints and other department personnel considerations, each department is authorized to supplement these regulations provided that the Reimbursement Limitations are not exceeded, and such supplements do not constitute deviation from provisions of the reimbursement.
IRS Regulation Compliance
It is the University’s responsibility to comply with Internal Revenue Service (IRS) regulations. All Moving & Relocation reimbursements, with the exceptions of moving household goods and personal affects, temporary in- transit storage and traveling to the new place of residence, must be included in the employee’s gross income on the Federal W-2 form. Adherence to IRS moving and relocation regulations for income reporting and tax deduction and reporting applies to all departments, even when non-State (local) funds are used.
The eligibility of any employee for reimbursement of moving and relocation expenses involves University Discretion. Each University has the authority to approve or disapprove moving and relocation expense reimbursements.
Eligible employees must be salaried employees of the University in regular, full-time positions or as defined by the University. Employees who qualify for moving and relocation reimbursement are eligible for expenditures to transport the employee, family (spouse or dependent that resides in the household and moves to the new location), household goods and personal effects from the former residence to the new work location.
To be eligible for reimbursement, the employee’s relocation must meet all three (3) of the following conditions:
- Relocation at employer’s request – The relocation must be at the request of, and for the good of, the University as determined by the Authorized Approver.
- Relocation distance – The distance between the employee’s new work location and former residence must be at least fifty (50) miles greater than the distance between the employee’s old work location and the former residence. Exceptions to this condition may be allowed as described by policy.
- One-year employment – The employee must satisfactorily maintain employment on a full-time basis, as defined by the University, for at least one year, or as specified by the Agreement for Reimbursement of Moving & Relocation Expenses, commencing on the date that the employee starts work on a regular basis at the new location.
Please refer to the Moving and Relocation Policy for further details.
Below is a summary of allowable expenses and policy limitations. Please refer to the Moving and Relocation Policy for further details.
Moving and Relocation Expense Summary
- Maximum reimbursement is limited to $15,000, excluding Common Carrier expenses and up to thirty (30) days of temporary (in-transit) storage.
- A maximum amount is not placed on Common Carrier and temporary storage expenses.
Moving and Relocation related travel is eligible for reimbursement for the following purposes:
- Trips for actual house hunting
- The initial trip (employee’s move to new residence) after employment
- The trip to bring the family to the new residence (temporary or permanent)
- Pre-employment travel, such as interviewing, testing, and related activities incurred by or for a prospective employee before the applicant has accepted employment are termed pre-employment expenses and are not considered moving and relocation expenses.
House Hunting (included in $15,000 limitation)
- Expenses incurred by the employee and spouse for cost of transportation (including rental car), meals, and lodging are eligible for reimbursement in accordance with VCU Travel Policy.
- Limited to three (3) trips for the employee and three (3) trips for the spouse. The maximum number of reimbursable lodging nights is fifteen (15). A night of combined lodging for both the employee and spouse counts as one (1) night.
Temporary Quarters (included in $15,000 limitation)
- Reasonable lodging or rent may be claimed for a maximum of ninety (90) days not to commence earlier than thirty (30) days prior to 1st day of employment.
- Reasonable residential parking fees are allowed during the ninety (90) day period.
- Meal per diem may be claimed for the first thirty (30) days of residence in temporary quarters. Meal per diem is set by GSA rates and is based on the location of lodging.
Home Sale (included in $15,000 limitation) – A copy of the signed closing statement must be included as supporting documentation.
- The following expenses related to the sale of the principle residence due to moving and relocation are reimbursable:
- Actual expense of real estate commission
- Attorney fees
- Escrow fees
- State or local transfer taxes
- Pest inspections
- The following expenses are not reimbursable:
- Sales commissions and similar expenses if the employee acts as a selling agent (closing and legal costs are allowed)
- Sales commissions and similar expenses if the employee acts as a selling agent (closing and legal costs are allowed)
- Advertising and “Fix-up” costs
- Loss sustained on sale of residence
- Real estate and capital gains taxes
- Payment and repayment of interest
- Points or loan payment charges that are negotiable
- “Carrying” costs (maintenance fees, utilities, principle, etc.)
- Mortgage penalties
- Buyer’s closing costs, including Virginia fees
Home Purchase (included in $15,000 limitation) – To qualify for reimbursement to purchase a replacement home (i.e. primary residence only) the relocated employee must have owned a primary residence at the prior location, which due to relocation resulted in disposal of the residence. A closing statement showing the sale of the previous residence, as well as the signed closing statement showing the new home purchase expenses must be submitted with the reimbursement packet. See the Moving and Relocation Policy for further eligibility requirements.
- The following expenses are reimbursable (expenses not specifically listed below are not reimbursable):
- VA funding fee
- Loan origination fee, or lease processing fee
- Mortgage survey
- Appraisal fee
- Credit report
- Title search
- Recording fee
- Title insurance
- Attorney fee
- Home inspection (limit 1)
- Notary fees
Lease Cancellation (included in $15,000 limitation)
- The settlement of a lease in the former residence is reimbursable if the settlement is due to moving and relocation. A copy of the signed lease pages showing the Early Termination terms are required as supporting documentation.
Common Carrier (excluded from $15,000 limitation) – Cost to transport the employee’s household goods and personal effects from the former principle residence to the residence at the new work location.
- If using a contracted vendor and expenses are $10,000 and over, quotes are not required.
- If not using a contracted vendor and expenses are $10,000 and over, three (3) quotes are required. The lowest quote should be used.
- For expenses less than $10,000, only a single quote is required.
- If a contracted vendor is not being used and expenses are greater than $10,000, departments should contact Purchasing for guidance.
Self Moving (included in $15,000 limitation) – The following costs are reimbursable with appropriate documentation and receipts:
- Moving Vehicle Rental – Moving van, truck, hand truck, or other appropriate moving equipment and gas used by the rental truck during the move are reimbursable items.
- Labor – Reimbursement is limited to a reasonable hourly wage with the maximum total being $500. Labor provided by the employee or immediate family member(s) is not reimbursable. A receipt from the individual employed, with amount paid and a signature must be provided as supporting documentation.
- Packing Supplies – Reimbursement for the purchase of moving supplies, such as packing paper, boxes or cartons must not exceed $500.
- Mileage – If a personally-owned or borrowed moving vehicle is used in the move, reimbursement will be allowed using the IRS mileage rate. The current mileage rates are $.555/ miles and $.246/ mile. A vehicle with a trailer in tow will also be reimbursed using the IRS mileage rate.
- Parking/Tolls – Receipts are required for individual claims greater than $25.
Storage (excluded from $15,000 limitation)
- Maximum of thirty (30) days of temporary (in-transit) storage of household goods is reimbursable, if the employee can’t move directly into the new residence.
Non-Reimbursable Expenses – Expenses not specifically allowed in the Moving and Relocation Policy are not reimbursable. The following is an example of expenses that are not reimbursable (this list is not all inclusive):
- Homeowner’s insurance
- Cost to move a pet
- Laundry or dry cleaning while in temporary quarters
- Cost to transport recreation vehicles
- Insurance in excess of bulk rate coverage provided by the Common Carrier
- Rent deposits
- Air fare above Coach/Economy class
Applicable Federal and State laws require certain reimbursements to relocated employees to be included in the employee’s gross income, and certain relocation expenses to be excluded.
Expenses which constitute qualified moving expense reimbursements under Federal guidelines should not be considered as taxable income. Expenses which are not qualified are taxable and should be included in the employee’s W-2 tax withholding statement. Each employee is ultimately responsible for the proper reporting and tax treatment of any reimbursements to the IRS for each tax year. It is recommended that the employee consult a tax advisor or devote personal time to a detailed review of tax regulations to determine the effect upon personal income tax liability. Additionally, IRS publication 521, Moving Expenses, is available upon request from the IRS.
Step by Step
Know Qualified Moving Expenses:
Qualified moving expenses are defined as the reasonable costs of (1) moving household goods and personal effects from the former residence to the new residence (this includes common carrier and in-transit storage expenses), and (2) travel—including lodging during the period of travel—from the former residence to the new place of residence. Qualified moving expenses do not include any expenses for meals.
Know Non-Qualified Moving Expenses:
The following costs do not constitute qualified moving expenses under Federal guidelines:
- Pre-move house hunting trips
- Temporary living expenses in the general location of the new job and,
- Selling or settling an un-expired lease on the former residence or the cost of buying a new residence.
Qualified moving expenses are excludable from gross income and wages for income and employment tax purposes to the extent paid for by the agency or University. The reimbursement of expenses which do not constitute qualified moving expenses reimbursements under the IRS guidelines must be added to the employee’s income as taxable income with the appropriate Federal and State income taxes withheld.
|If the…||Then the…|
|Employee terminates University employment before the obligated one year of service.||Employee refunds to the University a prorated amount of the gross amount of moving and relocation reimbursements. In this situation, actual reimbursements received by employee and paid to third parties on the employee’s behalf, and all taxes deducted that relate to these reimbursements, are prorated based upon the time employed.|
|University required the relocation.||Employee is not required to make a repayment of expenses.|
|University elects to terminate the employee due to unsatisfactory job performance and not due to standards-of-conduct violations.||Employee is not required to make a repayment of expenses.|
|Employee’s termination is for other reasons beyond the employee’s control and found to be acceptable by the employing University.||University can waive repayment or require prorated repayment based upon the time employed.|
For More Information
Travel & Corporate Card Services »
912 W. Grace Street, 5th Floor
Richmond, Virginia 23284