Southern Polytechnic State University           

Policy and Procedure Manual

P & P Number 802.04

Approved:  April 11, 2008

RELOCATION EXPENSE

Contents

This P& P includes the following main sections

r           Background

r           Policy

r           Reimbursement Rules and Guidelines

r           Taxing Reimbursement

r           Reimbursable Expenses

r           Non-Reimbursable Expenses

r           Payment Process

r           Resources

Background

This section describes Southern Polytechnic State University’s procedure for relocation expense reimbursement. Relocation expenses reimbursement is a negotiating tool for managers to accomplish recruitment goals when hiring an employee to initial service with Southern Polytechnic State University.

Policy

It is the policy of Southern Polytechnic State University to provide relocation assistance associated with moving expenses, when necessary, to new employees when authorized by the President or the appropriate Senior Administrator. Provisions for relocation expenses must be agreed upon at the time of appointment and must be stipulated in the offer letter.  A maximum allowance must also be set forth in the written offer letter by the authorized appointing party.

Reimbursement Rules and Guidelines

Payment for reimbursement of moving and relocation expenses and related taxes, if any, must be funded from the budget of the hiring division.

When the University provides moving and relocation reimbursement, the maximum dollar amount is limited to $2,000.  The $2,000 limit includes all gross reimbursements, i.e., actual reimbursement paid to the employee, costs incurred when an employee chooses to move himself/herself, all payroll taxes deducted that relate to the reimbursement, and the employer’s share of FICA taxes. All these expenses must be reasonable and necessary in order to be approved for payment by the University’s Controller’s Office.  See Reimbursable Expenses section for more details on covered expenses.

Taxing Reimbursement

Reimbursement of qualified and non-qualified expenses may be made in accordance with the provisions as outlined in IRS Publication 521 – Moving Expenses.  Reimbursement of non-qualified expenses is subject to withholding of applicable income and employment taxes. Taxable reimbursements are reported on the annual Form W-2.

IRS guidelines for reimbursement require that the distance between the old home and the new place of work 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, then moving reimbursement will be reported as taxable income subject to applicable income and employment taxes. Moving expenses excluded from taxable income are defined as the reasonable cost of:

·        Moving household goods and personal effects from the former residence to the new residence (this includes common carrier), and

·        Traveling (including lodging but not meals during the period of travel) from the former residence to the new place of residence.

All other eligible expenses may be reimbursed but will be paid through the payroll system with appropriate taxes withheld.

Discretion is advised at all times when incurring and reporting expenditures of public funds. SPSU employees and management should take the necessary steps to ensure that all reimbursements are thoroughly documented and reviewed in every case.

Reimbursable Expenses

The following list includes both qualified and non-qualified expenses which are covered by the Southern Polytechnic State University Relocation Expenses Policy:

Qualified reimbursable expenses (not subject to tax withholding)

      1. Commercial moving company

      2. Charges for packing, crating, mailing and/or shipping household goods; and other miscellaneous packing supplies

      3. Optional insurance on items such as furniture, clothing, and utensils

      4. Rental truck

      5. In-transit storage for up to 30 consecutive days

      6. Shipment of car(s), if not used in the move

      7. Travel and lodging costs for one trip (employee and family) from the old residence to the new residence, which may include: Actual gas cost, based upon receipts or IRS current rate for personal or rental vehicles as indicated on the Relocation Request Form

      b) Lodging in transit, not to exceed the current allowable per diem rate as set by the United States General Services Administration for a daily rate.

      c) Airfare (coach only)

      d) Rental car (economy only)

      e) Tolls, taxi, limousine, or parking

      f) Pet shipping charges

       Non-qualified reimbursable expenses (subject to tax withholding)

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

      2. Cost of meals at any point in the relocation process. Maximum allowance is $28 per day per person. Meal receipts are not required.

      3. House hunting expenses (one trip, not to exceed five days) may include:

      a) Actual gas cost, based upon receipts or IRS current rate for personal or rental vehicles

      b) Lodging, not to exceed the current allowable per diem rate as set by the United States General Services Administration for a daily rate.

      c) Airfare (coach only)

      d) Rental car (compact only)

      e) Tolls, taxi, limousine, or parking

      4. Temporary housing.

Non-Reimbursable Expenses

The following expenses will not be paid or reimbursed by the university:

      1. Storage (excluding 30 days in transit)

      2. Meals and travel costs incurred by laborers

      3. Expenses incurred by persons not considered to be dependents for tax purposes

      4. Costs related to immigration

      5. Utility and telephone installation charges

      6. Loss of security deposits

      7. Real estate expenses

      8. Postage costs for realty and mortgage documents

      9. Personal telephone calls, tips, movies, or other entertainment

      10. Extraordinary items requiring special handling (e.g., boats)

      11. Bank fee for cashiers checks

Payment Process

Any relocation expenses must be negotiated with the new faculty or staff member during the hiring process. The offer letter must state the maximum reimbursement amount allowed. It is important to inform the new employee that applicable taxes are withheld for "non-qualified" expenses as defined in the policy. A copy of this policy should also be provided with the offer letter.  Contact the Office of Human Resources for clarification or assistance.

REIMBURSEMENT PROCESS

A.     Employee responsibilities

1. Complete the Relocation Request Form.

2. Submit original itemized receipts (receipts not required for mileage and/or meal reimbursement) to the employing unit. The Controller’s Office will return all original receipts to the employee for tax filing purposes; however, it is strongly recommended that the employing unit or the employee retain copies.

B.     Employing unit responsibilities

1.      Review relocation documentation for appropriate signature and compliance with University policy and IRS requirements.

2.      Submit the offer letter, the completed Relocation Request Form, the Relocation Check Request Form, and original itemized receipts to the Controller’s Office as soon as possible. If reimbursement is submitted after the initial 12 months of employment, then written explanation of the delay must accompany the request.

C.     Controller’s Office responsibilities

1.      Process payment of non-taxable expenses (paid directly to the employee) through Accounts Payable.

2.      Process payments for taxable expenses through the payroll system; Ensure appropriate taxes are withheld through the Payroll system.

3.      Process payments to third-parties through Accounts Payable; Ensure appropriate notation of payment on the employee’s W-2.

4.      Retain official documentation for audit purposes.

DIRECT PAYMENT

Employing unit will generate a Payment Request Form for direct payment of commercial carriers for moving expenses.  Payment Request Form should be submitted through the normal approval process. 

Resources

For consultation:

§         Office of Human Resources, 678/915-7331

For forms:

§                   Relocation Expense Authorization Form

§                   Relocation Check Request

For more information:

Internal Revenue Service (IRS) http://www.irs.gov/

US GSA Per Diem Rates http://www.gsa.gov