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November 4, 1994

COMPTROLLER'S MEMORANDUM NO. 07 (1994-95)

SUBJECT: PAYMENTS OR REIMBURSEMENTS FOR MOVING EXPENSES

The Omnibus Budget Reconciliation Act of 1993 (OBRA '93) changed the requirements applicable to payments or reimbursements for employee moving expenses. The purpose of this memorandum is to explain those changes and the changes in our procedures for withholding taxes and for reporting reimbursements and payments made after December 31, 1993.

For purposes of this memorandum, "incurred" means that the services have been rendered in connection with the move.

MOVING EXPENSES INCURRED PRIOR TO JANUARY 1, 1994

Some moving expenses may have been incurred prior to January 1, 1994, but paid to the vendor or reimbursed to the employee after December 31, 1993. As in prior years, these payments and reimbursements will be reported as "Wages, tips, other compensation" (wages) in Box 1 on Form W-2, with the notation "93 MOVE" in Box 14. Earnings code 9103 is used to record the payment or reimbursement for moving expenses incurred prior to January 1, 1994.

MOVING EXPENSES INCURRED AFTER DECEMBER 31, 1993

Payments to vendors or reimbursements to employees for certain moving expenses incurred after December 31, 1993, are "qualified moving expenses", and will not be reported as wages on Form W-2 if such expenses and the move itself meet the following conditions:

  1. The expenses are reasonable expenses of moving household goods and personal effects from the former residence to the new residence, and of traveling (including lodging) from the former residence to the new place of residence;

  2. The expenses do not include any expenses for meals;

  3. If the move represents the commencement of work by the taxpayer at a new principal place of work located outside the United States and its possessions, the reasonable expenses may also include those for moving household goods and personal effects to and from storage, and of storing such goods and effects for part or all of the period during which the new place of work continues to be the taxpayer's principal place of work;

  4. The taxpayer's new principal place of work is at least 50 miles farther from his former residence than was his former principal place or work, or if the taxpayer had no former principal place of work, is at least 50 miles from his former residence; and

  5. The employing agency reasonably believes, at the time of payment or reimbursement of the moving expenses, that during the 12-month period immediately following his arrival in the general location of his new principal place of work, the taxpayer will be a full-time employee, in such general location, during at least 39 weeks.

If the reimbursement or payment for moving expenses are "qualified moving expenses", the reimbursement or payment will not be reported as wages or other compensation on Form W-2, but will be reported in Box 13 on Form W-2. Please note, the above are Internal Revenue Code criteria for determining qualified moving expenses. Rules 6C-5.820 and 60L-9, Florida Administrative Code, establish moving expense expenditures' eligibility for payment by the universities and other agencies as defined in Section 216.011(1)(kk), Florida Statutes, respectively. Moving expenses for the entities of the Judicial Branch as defined in Section 216.011(1)(r), Florida Statutes, are governed by Section 10 of the Florida State Courts System Personnel Regulations Manual.

The reimbursement or payment for moving expenses which are not "qualified moving expenses" will be reported as wages on Form W-2 and will be subject to employment taxes. For reimbursements of moving expenses to the employee, the taxes will be calculated by the Bureau of State Payrolls and deducted from the amount due to the employee. For payments to vendors for moving expenses, the amount of taxes due will be calculated by the Bureau of State Payrolls, a journal transfer will be prepared charging the agency for the applicable taxes, and a letter will be forwarded to the paying agency detailing the amount of taxes to be recovered from the employee. The agency will be required to recover from the employee the employee's share of the remitted taxes.

ADDITIONAL CONSIDERATIONS

The Bureau of State Payrolls will issue the employee a Form 4782 for all payments or reimbursements for moving expenses.

A voucher requesting payment for moving expenses must contain sufficient information to permit a determination of the proper taxation and reporting of the payment, including the locations of former and new principal places of work and residence, and the distances between them. If the employing agency does not reasonably believe, at the time of submission of the payment request, that during the 12-month period immediately following his arrival in the general location of his new principal place of work, the employee will be a full-time employee, in such general location, during at least 39 weeks, the agency should include a statement regarding this determination. Our staff will review the documentation submitted with the voucher and make the appropriate determination.

Currently, object code 2810XX- Moving Expenses- Payments to Third Party and object code 2820XX- Moving Expenses- Payments to Employee, are used for payments for employee moving expenses. Effective immediately, agencies should discontinue using these two object codes and begin using object code 2800XX- Employee Moving Expenses. Object codes 2810XX and 2820XX have been inactivated and may not be used for processing payments. This change will not affect the recording or reporting of payments already made.

The following new earnings codes have been established to accommodate these new reporting requirements:

9194Qualified Moving Expenses- Vendor
9195Qualified Moving Expenses- Employee
9196Non-Qualified Moving Expenses- Vendor
9197Non-Qualified Moving Expenses- Employee

Prior to incurring or allowing an employee to incur moving expenses, universities and other agencies as defined in Section 216.011(1)(kk), Florida Statutes, should review the requirements of Rules 6C-5.820 and 60L-9, F.A.C., respectively. Entities of the Judicial Branch as defined in Section 216.011(1)(r), Florida Statutes, should review the requirements of Section 10 of the Florida State Courts System Personnel Regulations Manual.

Since the Bureau of State Payrolls serves as a common paymaster, universities that pay moving expenses through local funds, including payments by foundations, must provide the Bureau of State Payrolls copies of documentation applicable to each payment, including sufficient information to enable the Bureau to determine whether the expenses were "qualified expenses".

If additional information is needed, please contact the Bureau of State Payrolls at 488-6416, Suncom 278-6416.