Changes to Moving Expenses under Tax Cuts and Jobs Act

Reimbursements for moving expenses made to employees or paid directly to third parties on and after January 1, 2018 and through December 31, 2025, are to be included in wages subject to income tax, withholdings, FICA and unemployment tax. An exception to this provision applies to members of the Armed Forces on active duty moving pursuant to a military order and incident to a permanent change of station.

Employers will need to change their tax configuration setting for earnings to reflect the inclusion in wages subject to FIT, FITW, FICA and FUTA effective January 1, 2018. A corresponding change is also required for state and local income tax and withholding purposes for those states that conform the IRC as of January 1, 2018.


Westbrook CPA