Moving Expenses Taxable Under New Tax Law

Sent to all UCI Campus and Medical Center Employees on Feb. 15, 2018.

Many provisions of the federal tax legislation passed late last year affect the University of California. One provision that will have an immediate impact on the University and its employees relates to the reimbursement and payment of moving expenses.

Prior to the new tax legislation, qualified moving expense reimbursements were excludable from an employee’s income if reimbursed by an employer. The new tax law treats all moving expense reimbursements as taxable. This includes moving reimbursements paid directly to an employee and payments made directly to a vendor.

Therefore, effective Jan. 1, 2018, all moving expense reimbursements are taxable to the employee. Taxes will be automatically deducted from the payment and reported on the employee’s current year W-2. Amounts will be treated as taxable whether they are reimbursed to an employee or paid directly to a vendor. Please note that although all moving expenses are taxable, reimbursements/payments are still limited to those expenses which are allowed under UC Irvine Delegation of Authority 558. Moreover, departments may choose not to reimburse moving expenses.

As stated above, other sections of the tax legislation will affect the University. We are currently working through these issues and will update the campus as more information becomes available. If you have any questions, please contact the Payroll Office at payroll@uci.edu.

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