41.111:  Relocation Expenses

SUPERCEDED as of November 4, 2009

Current Version

Status:	Approved on January 6, 2004	Signatures and dates on archival copy
Effective:	when approved
Initiated by:	Mary Patacca Director of Procurement Services
Reviewed by:	Herman ("Butch") Hill, Chair Policy and Procedure Review Committee
Endorsed by:	Gary North Vice President for Administration and Finance
Approved by:	Stephen Kopp Provost

Purpose

This policy governs the reimbursement of relocation expenses for new employees.

Policy

Relocation expenses for new regular faculty and staff may be provided if funds are available in the departmental budget. The total reimbursement for transportation of household goods or travel and lodging costs from the old to the new residence are allowable to the extent authorized in a letter of offer to the prospective employee - up to $5,000 expended over a period of up to two years.

The College of Osteopathic Medicine (COM) Policy 3-022 further governs expenses and reimbursements involving COM physicians.

Procedures

I.  Policy Guidelines

University relocation policy is guided in part by IRS Publication 521 Moving Expenses. For an overview of these regulations, see the ALLOWABLE EXPENSES and TYPES OF ALLOWABLE EXPENSES sections of this policy, below. For details, go to http://www.irs.gov/formspubs/lists/0,,id=97819,00.html, and choose Publ 521, "Moving Expenses."

II.  Options for Payment of Relocation Expenses

A.  Direct Payment to the New Employee Prior to the Move

Payment of the entire amount will be issued by check to the individual. However all applicable taxes will be deducted on the employee's first paycheck - payment will be reported as taxable wages on the annual Form W-2. The employee should retain documentation of expenses for tax purposes. Deduction from first paycheck will be approximately one-third (1/3) of original payment.

B.  Reimbursement of the New Employee's Out-of-pocket Expenses

Reimbursement of certain qualified moving expenses may be excluded from taxable income. All other (nonqualified) expense reimbursements are subject to income tax withholding. The employee should retain documentation of expenses for tax purposes. Nonqualified reimbursements are reported on the annual IRS Form W-2.

C.  Direct Payment to a Service Supplier

Payment may be issued directly to a mover, or any other applicable service provider.

III.  General Instructions

Relocation reimbursement amounts and payment options should be negotiated with the new employee during the hiring process. The letter of offer should specify the payment option(s) selected and define the maximum net (after taxes) amount for the option(s) selected. Total amount reimbursed may not exceed the agreed upon amount. A copy of this policy should be provided with the letter of offer.

IV.  Payment Instructions

Payment requires either a Direct Payment (Request for Payment) form or Requisition (Request for Purchase Order) form. All forms should be submitted to the General Accounting and Financial Reporting Office (GAFR), 218 HDL Center for processing. The letter of offer should accompany all forms. If the Request is submitted more than 12 months after initial employment, a written explanation of the delay must be attached. For direct payment to the employee (option 1), use object code 4701. For all other relocation expenses (options 2 or 3), use object code 4700.

A.  Direct Payment to the New Employee (Option 1)

Use the Direct Payment form. Enter the new employee as "payee". A copy should be retained with the department employee files. The person listed on the bottom of the Request for Payment form will be responsible for check pickup and disbursement of payment to the new employee.

B.  Reimbursement (Option 2)

To claim reimbursement for out-of-pocket relocation expenses, the new employee should submit a Direct Payment form. The form should list the new employee as "payee". Original itemized receipts, to document out-of-pocket expenses, must be submitted. Receipts are not required for mileage reimbursement.

C. Direct Payment by the University to Service Supplier (Option 3)

To request that direct payment be issued to a mover, or any other applicable service provider, two methods are available:

1. Use of an Ohio University Purchase Order: In lieu of payment by the individual, some vendors will accept a Purchase Order. If the individual does not intend to pay the vendor directly, the vendor may require a Purchase Order. The prospective employee's department must submit a Requisition form to the General Accounting and Financial Reporting Office (218 HDL Center) at least two weeks prior to the date service is to be performed, including the following information:
   • Service provider's name
   • Type of service to be performed
   • Name of the prospective employee
   • Date the service is expected.
   • Dollar amount to be paid.
   • Indication of whether the dollar amount is firm or estimated.
   • Attached copy of any written price quote obtained.

2. Use of a Direct Payment form: Submit the Direct Payment form when a vendor has billed after the service has been provided. Attach the original, unpaid invoice to the form. List the vendor as "payee".

V.  Selection of Mover

The university has contracted with preferred movers. Newly hired faculty and staff are encouraged to utilize these movers if possible. Contact the Purchasing and Contracting Office (740) 593-1960 for more information.

VI.  Tests for Allowable Moving Expenses

A.  Distance Test

For moving expenses to be qualified for exemption from tax withholding, the distance between the old home and the new place of work must be at least 50 miles greater than the distance between the old home and the old place of work. If the distance test is not met, reimbursements to the individual will be reported as taxable income.

B.  Time Test

For moving expenses to be qualified for exemption from tax withholding, you must work full time at least 39 weeks during the first twelve months after you arrive in the general area of your new job location. What constitutes full time employment depends on what is usual for your type of work in your area.

VII.  Qualified Allowable Expenses

If you meet the distance and time tests, expenses of moving your household goods, and of traveling to your new home, may be reimbursed and are not subject to tax withholding. Expenses must be reasonable. For example, the cost of traveling from your former home to the new one should be by the shortest, most direct route available by conventional transportation. Expenses must also fall into one of the following categories:

A.  Automobile Expenses

If you use your car to take yourself, members of your household, or your personal effects to your new home, you can figure your expenses by using either:

1. Your actual expenses, such as gas and oil for your car, substantiated by an accurate record and receipts; or

2. 13 cents a mile (current as of August, 2003; check the IRS publication mentioned in Sub-section I, above, for changes).

B.  Moving Expenses for Members of Your Household

A member of your household is anyone who has both your former and your new home as his or her home. It does not include a tenant or employee, unless you can claim that person as a dependent.

C.  Household Goods and Personal Effects

1. Costs of packing, crating, and transporting your household goods and personal effects, and those of the members of your household from your former to your new home.

2. Costs of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home.

3. Costs of connecting or disconnecting utilities.

4. Costs of shipping your personal auto and household pets to your new home.

5. Costs of moving your household goods and personal effects from a place other than your former home. May not exceed cost that would have resulted from moving them from your former home. Does not include the cost of moving furniture you buy on the way to your new home.

D.  Travel Expenses

Travel expenses are defined as the costs of transportation and lodging for yourself and members of your household while traveling from your former home to your new home. This includes expenses for the day you arrive, and lodging expenses in the area of your former home, within one day after you could not live in your former home because your furniture had been moved. It includes only one trip to your new home for yourself and members of your household, however, all of you do not have to travel together at the same time. This does not include any expenses for meals.

VIII.  Nonqualified Allowable Expenses

Expenses in the following categories are reimbursable, but are subject to tax withholding:

1. Travel and lodging cost incurred during additional trips from the old residence to the new residence.

2. Cost of meals at any point in the relocation process.

3. Storage above 30 days in transit

4. House-hunting expenses (one trip, not to exceed five days)

5. Moving expenses that do not meet the time or distance test, but do fall into the reimbursable categories shown above (Sub-section VII).

IX.  Non-reimbursable Expenses

Moving expenses that do not fall into any of the categories shown above are not eligible for reimbursement by the University. Examples of ineligible relocation expenses are relocation costs of extraordinary items requiring special handling (e.g., large vehicles, farm equipment), real estate costs or expenses associated with buying or selling a home, immigration costs, loss of security deposit, etc.

X.  Exceptions

The President, Provost, or Vice-Presidents may approve exceptions to this policy as appropriate. Include a written copy of exception approval with your Direct Payment or Requisition forms.

Reviewers

Proposed revisions of this policy should be reviewed by:

1. Policy and Procedure Review Committee

2. Planning Unit Heads

Forms

The following forms are specific to this policy:

1. The Direct Payment form is available at http://www.ohio.edu/finance/forms/financeforms.cfm.

2. The Requisition form is available at http://www.ohio.edu/finance/forms/purchasing.cfm.

Dick Piccard revised this file (http://www.ohiou.edu/policy/41-111.html) on June 28, 2007.

Please E-mail any comments or suggestions to "policy@ohio.edu".