Subject: Moving Expenses
The University of Maine System (UMS) is required to account for and report on the reimbursement of moving expenses in accordance with rules and regulations prescribed in the Internal Revenue Code. The purpose of this administrative practice letter is to establish System guidelines to ensure compliance.
Under the Tax Cuts and Jobs Act of 2017, the personal deduction for moving expenses and the exclusion from income of employer-paid moving expenses are suspended from January 1, 2018 through December 31, 2025. As a result, all moving expenses incurred and paid on or after January 1, 2018, whether reimbursed to an individual or paid to a vendor on behalf of an individual, are taxable income to the individual and as such, reimbursements will be considered taxable income, appropriately reported to the Internal Revenue Service, and taxed accordingly. All moving expense reimbursement requests must be submitted no later than one (1) year from when expenses were incurred.
Reporting of moving expenses incurred and paid after December 31, 2017 through December 31, 2025
All requests for Moving Expense reimbursements for each campus and Governance & University Services must be forwarded to the University Services Payroll Office. Requests must be submitted using the form included with this APL after obtaining all necessary approvals. The request must be accompanied by the employee’s contractual Moving Expense agreement and any other documentation as required by the department.
All employee Moving Expense reimbursements will be reimbursed directly to employees through the University Services Payroll Office. Employees will be responsible for paying third-party vendors; payments to third-party vendors must not be processed through Procurement.
Moving Expense reimbursements will be processed and paid in a timely manner. Employee reimbursements will be included with the regular monthly payroll cycle.
The above methodology will result in the proper tax reporting of Moving Expenses and will result in expenses being assigned to the appropriate ChartFields.
Reimbursement vs. Allowance
Hiring departments may choose to pay an employee an allowance to cover moving/relocation expenses; allowances are processed by submitting a completed Additional Compensation form with appropriate approvals.
This APL has been approved by the Vice Chancellor of Finance and Treasurer of the University of Maine System.