Help: Relocation Reimbursment (employee, employer, job, companies)

[MileHighDreamin]

Out of suggestion from another user that I should pose this question here, I am doing so:


I accepted a job cross country that offered me a relocation reimbursement. I have submitted a portion of my receipts since I am only half way done relocating.

I was told today that I would get the check, however it would be taxed.... HUH?

I have already paid taxes on the money that was used to make the move. How is this right?

There have been numerous employer reimbursements in the past for relocation and never once was I told that I have had to pay taxes on the money because it was "income"

- Money earned as an employee previous employer and taxes taken out, then put into savings account
- Gas/moving truck expenses paid for with said money
- documentation submitted to new employer of gas/moving truck (assumption of documentation would be a business expense for the company come time when their taxes are done, hence employer asking for receipts and not tax deductible on my income taxes)
- check cut for reimbursement
- taxes taken out and labeled as "income" on reimbursement

= double taxation on income, does it not?

This just does not seem to be adding up correctly to me. Like I said, I have done this numerous times before and not once have I ever had to pay an income tax on a relocation reimbursement... EVER.

[RoadWarrior12]

Taxes will be withheld, and all your expenses are tax deductible.

Some companies do it this way, many "gross up" the reimbursement, then tax it.

[MileHighDreamin]

Originally Posted by RoadWarrior12

Taxes will be withheld, and all your expenses are tax deductible.

Some companies do it this way, many "gross up" the reimbursement, then tax it.

How am I suppose to deduct the expenses if they have taken the receipts for their record and assuming for their taxes?

[MileHighDreamin]

Also, they are not giving me a lump sum to spend however I choose, which I could understand the taxation then. They are reimbursing me to the penny for what I have spent.

[RoadWarrior12]

Originally Posted by MileHighDreamin

Also, they are not giving me a lump sum to spend however I choose, which I could understand the taxation then. They are reimbursing me to the penny for what I have spent.

Crap. Sorry. Just read your first post again. Something has gone totally wrong here - they cannot tax a reimbursement like that.

Reimbursements aren't income.

If they do withhold taxes, you need to file a 2106 to claim these.

[MileHighDreamin]

OK... Just sucks if they take taxes out now. Kind of hard to take a hit on thousands of $$$ in income taxes right now.

[RoadWarrior12]

I wouldn't just let it go that route. My first call this AM would be to whomever hired me, explaining the difference between an "accountable" and "non-accountable" reimbursement plan - and the fact that they're doing this wrong.

[charlygal]

Originally Posted by MileHighDreamin

How am I suppose to deduct the expenses if they have taken the receipts for their record and assuming for their taxes?

You didn't copy the receipts?

[joe from dayton]

Did they mistakenly issue you a payroll check instead of a reimbursement check? Like RW12 said, I'd be on the phone today.

[MileHighDreamin]

Originally Posted by charlygal

You didn't copy the receipts?

I have never really needed to. I can get copies though, no problem.