In accordance with the IRS rules for moving expenses, the following guidelines must be followed:
- Distance test - the faculty moved at least 50 miles.
- Time Test - the move took place within one year of the employment start date.
The IRS breaks moving expenses into two categories:
- Qualified (non-taxable):
- Moving household goods and personal effects from the former home to the new home. The best way for moving expenses to be paid is directly to the vendor. Payments to a third party do not need to be reported on a W-2.
- Traveling (including lodging but not meals) from the former home to the new home. These items must have a business connection and follow the rules established by UWMF for reimbursements which included proper documentation, itemized receipts etc.
- Mileage. When transporting the employee and family, the one-way mileage cost of moving one vehicle to the new residence is reimbursed at the present mileage reimbursement rate allowed (2016 = .19 cents per mile). Base mileage on using the most direct route, not exceeding mileage as shown on the Bill of Lading.
- Non-qualified (taxable):
- Includes reimbursements for moves less than 50 miles, temporary lodging, meals and stipends. In the event that these expenses are reimbursed, the IRS requires that the employer report the non-qualified expenses on the employee's W-2 as they are considered compensation (an addition to gross wages). Examples of non-qualified expenses include:
- Pre-move house hunting expenses
- Expenses of buying or selling a home (including closing costs, mortgage fees, and points)
- Any part of the purchase price of a new home
- Any costs associated with the sale of the former home (improvements, loss on sale, real estate taxes, mortgage penalties)
- Expenses of entering into or breaking a lease
- Security deposits
- Losses from disposing of memberships in clubs
- Storage costs
- Return trips to former residence
- Purchase of new furniture and the cost of transport
Which entity pays for new faculty depends upon their appointment title:
- Tenure track titles: expenses paid by UW School of Medicine and Public Health (UW SMPH). For further detail, refer to the UW Policy. (These expenses can be paid by UWMF in some cases as well.)
- Non-Tenure CHS and Clinical titles: expenses paid by UW Medical Foundation (UWMF). For further detail, refer to the UWMF Policy.
The UW System encourages use of contract moving vendors.
Faculty hires are not required to use these vendors. The Department requires 3 quotes as to ensure a cost effective rate.
- Who determines the dollar amount that will be paid?
- There are currently no poundage or dollar maximums established. The dollar amount allowed for each move must be established and approved by the Division Administrator and/or the Division Head.
- Who should I contact if I have other questions?
- The Division Administrator should be the primary contact for any moving expenses.