The sections of this policy include:
Payment and/or reimbursement of relocation and moving expenses is allowable when expenses are included as a formal and specific component of the original written offer of employment (Letter of Offer) made to the qualified applicant (the employee) and accepted by the employee in connection with employment at the University. To be eligible for relocation and moving expense reimbursement, the employee’s relocation must meet the following conditions:
To be reimbursed for moving and relocation expenses, the employee must accept the Letter of Offer and execute a Relocation and Moving Expense Agreement with the University prior to incurring any expenses. No University obligation exists, nor may any reimbursements be processed, until all parties execute the agreement. A link to the Relocation and Moving Expense Agreement has been provided below under the Forms/Instructions section of this policy.
The Relocation and Moving Expense Agreement will be signed by the employee, Department Head, and Dean or Vice President. Departments may commit reasonable amounts for an employee’s relocation and moving expenses in accordance with this policy and procedure. For relocation and moving expense budgets of $15,000 or more (per employee), approval from a Vice President is required and the Vice President must sign the Relocation and Moving Expense Agreement. Relocation and moving expense budgets include amounts reimbursed to employees and the direct payment by the University to third-party moving companies. The Relocation and Moving Expense Agreement will stipulate that:
In general, relocation and moving expenses will be paid on a reimbursement basis; however, sometimes the University may make payment directly to the third party commercial mover. No moving advances will be allowed. Reimbursements are limited to actual costs incurred up to the amounts agreed to by the department and the employee within the limits outlined in this policy. Reimbursements through other processes, such as petty cash or purchasing cards (P Cards), or direct payments to hotels, airlines, restaurants, car rental companies, or other vendors on behalf of employee which are processed outside of this policy and associated procedures are not allowed. To be eligible for reimbursement, expenditures must be reasonable, necessary, and incurred after the employee executes a Relocation and Moving Expense Agreement. In accordance with IRS guidelines, receipts must be submitted for reimbursement within sixty (60) days after expenses are incurred or paid to be considered as qualified, non-taxable moving expenses. Expenses submitted for reimbursement after sixty (60) days will be considered taxable income. All relocation and moving expense documentation is open for public examination. University employees and management should take necessary steps to ensure that all reimbursements and payments are thoroughly documented and reviewed in each case.
A Relocation and Moving Expense Payment Form, available through UGAmart, will be submitted for reimbursement by the department on behalf of the employee. A link to this form can be found below under the Forms/Instructions section. A link to UGAmart is also included under Related Information. Original documents must be submitted as support for expenses. Photocopies of invoices are not acceptable unless the original document was lost and a signed memorandum is attached to the check request or Relocation and Moving Expense Payment Form giving full explanation of the circumstances. Credit card statements or record of charge slips may be used as supporting documentation but may not serve as the primary document or receipt. A receipt is defined as a written acknowledgment that a specified remittance, article or delivery has been made. At a minimum, the name of the payee, date, details of the purchase and amount should appear on the receipt. Receipts should be submitted for all expenses with the exception of meals. Receipts for meals are not required; however, times of departure (for the day of departure) and return (for the day of return) should be noted on the employee travel expense statement to substantiate meals eligible for payment of per diem. See the Definitions section below for additional details regarding what constitutes “adequate documentation.”
In general, most sources of funding available to departments can be used to pay relocation expenses. There are certain notable restrictions which should be considered:
Expenditures to be reimbursed must be reasonable and necessary. According to the IRS guidelines, to be considered as “qualified” and non-taxable, relocation and moving expenses must also be incurred within twelve (12) months following the date the employee reports to work at the new location. Employees must execute the Relocation and Moving Expense Agreement prior to incurring any charges for payment or reimbursement. The University of Georgia has an “Accountable Plan” under IRS guidelines and therefore requires employees to adequately account for their expenses within sixty (60) days after they were paid or incurred. The total dollar limit for gross reimbursements made directly to the employee for all expenses, reimbursements and direct payment to third parties, may not exceed the amount stated in the Relocation and Moving Expense Agreement. Gross reimbursements (i.e. actual reimbursements received by the employee or paid to third parties on behalf of the employee) include any taxes withheld on these reimbursements.
Payment of relocation and moving expenses includes the following allowable expense categories. To demonstrate the tax implications of relocation and moving expenses to the employee, these categories are separated into “qualified” and “nonqualified” expenses in accordance with IRS definitions.
Qualified Expenses (not subject to tax withholding):
Payment or reimbursement of all other relocation and moving expenses allowable under this policy but not classified as qualified expenses (see above) will have appropriate taxes withheld (“nonqualified expenses”).
Nonqualified Expenses (subject to tax withholding):
Actual or “Final Move” to New Job Location:
Travel relating to relocation is eligible for reimbursement for only the trip to bring the employee (and household members if applicable) to the new residence. The cost of traveling from the former home to the new home should be by the shortest, most direct route available by conventional transportation. Household members are not required to travel together or at the same time. When the employee and household are traveling to the new home, expenses for in-transit meals and lodging will be reimbursed. Limits on lodging rates imposed by State Travel Regulations and University travel policy are applicable to meal and hotel expenses during travel. Reimbursement for in-transit meals is subject to tax withholding. Reimbursement for in-transit lodging is not subject to tax withholding. Transportation expenses also include parking, tolls, and mileage at the rate stipulated by current IRS rules.
Transportation and Storage of Household Goods and Personal Effects:
Common Carrier Moves: The actual costs paid for common carrier transportation of
the employee’s household goods and personal effects from the former principal
residence to the new residence at the new work location are reimbursable and are not
subject to tax withholding. If a common carrier is used, the amount of the actual costs is
allowed and is included in the total budget for relocation expenses as stated in the
Relocation and Moving Expense Agreement.
Self-Moves: If the employee chooses to move himself/herself, the maximum of actual costs allowed for reimbursement must be included in the Relocation and Moving Expense Agreement. These expenses are paid on a reimbursement-basis only from the employee’s original receipts. The following actual costs are reimbursable, within the total limitation, with appropriate documentation:
i) Moving vehicle rental.
Costs of renting a moving van, truck, trailer, hand truck or other appropriate moving equipment, vehicles and supplies are reimbursable. Purchase of such a vehicle or equipment is not reimbursable. The purchase of moving supplies, such as packing paper, boxes, or cartons may be reimbursed with appropriate receipts; however, items purchased that become personal property i.e. padlocks, trailer hitch receivers, dollies, etc. are not reimbursable. Gas used by the rental truck during the move is reimbursable with proper receipts.
ii) Labor used during move.
Reimbursement is limited to a reasonable hourly wage with the maximum total of $500. Labor provided by the employee or the employee’s immediate family member(s) is not reimbursable. A receipt from the business employed to provide labor, with signature and tax identification number, and amount paid must be attached to the reimbursement request.
If a personally owned or borrowed moving vehicle is used in the move, reimbursement is allowed at the standard mileage rate for moving expenses as specified in the current IRS regulations. Reimbursement will not be allowed to cover the “rental value” of the personally owned vehicle. A car or truck with a trailer in tow will also be reimbursed at the mileage rate specified for moving expenses in the current IRS regulations.
Tolls paid during the move are reimbursable provided the name of the facility (road, bridge, tunnel, etc.) is provided on the receipt.
The expense of storing household goods and personal effects for a maximum of six (6) consecutive months is reimbursable if the employee is unable to move directly into the new residence. This amount is includable in the Relocation and Moving Expense Agreement limitation. The first thirty (30) days of storage is a qualified expense (not subject to tax withholding); however, reimbursement for storage beyond the first thirty (30) days is a nonqualified expense and taxes will be appropriately withheld.
Payment or reimbursement of any relocation or moving expense not expressly outlined in this document must have approval by the department head, dean or vice president, and the cognizant senior vice president and must be included in the Relocation and Moving Expense Agreement signed by all parties. Payment of any relocation or moving expenses not expressly outlined in this document, which are approved for payment, will be treated as “non-reimbursable” expenses and may require limitations on funding sources. Payments for relocation and moving expenses should not exceed the amount agreed upon in the written Letter of Offer and Relocation and Moving Expense Agreement.
Interview expenses, unlike house hunting costs, occur prior to an accepted offer and do not fall within the scope of this policy. Job applicant travel does not include pre-move or house-hunting trips once an employment offer has been extended to the candidate. If travel is provided to the candidate between the time an offer has been made and the time the offer has been officially accepted, those travel expenditures cannot be made from a University account; however, departments can request expenses be paid directly from a university affiliated foundation if funds are available and approved by the affiliate. Once the offer has been accepted by the candidate, payment for travel expenses that are not business related (i.e. pre-move or house hunting trips) must follow procedures as outlined in this policy. Please refer to the University of Georgia Travel Policy for more information. A link to this policy is provided below under Related Information.
Expenses for moving office and lab equipment will be paid or reimbursed by the University of Georgia only if included in the Letter of Offer. These expenses also do not fall within the scope of this policy and are separate from the dollar amount offered to the employee to support moving the personal household. Please contact the Procurement Office at 542-2361 for more information on contracting for these services.
All expenses submitted for reimbursement must be actual, reasonable, necessary and within policy guidelines. Reimbursement can be requested in one of two methods: 1) UGAmart Relocation and Moving Expense Payment Form, and 2) hard copy check request. Regardless of the method of reimbursement, each employee eligible for moving and relocation reimbursement is responsible for:
Relocation and moving expenses and payment protocol, in accordance with this policy, must be discussed and finalized with the employee during the hiring process. Departments shall provide the employee with the written offer letter (which includes an amount for relocation expenses), will execute the Relocation and Moving Expense Agreement for Employees, determine the budget and funding sources for the expenses, complete and submit the Relocation Expense Authorization to encumber funds, and complete and submit invoices and reimbursement requests to Accounts Payable for processing. A link to the Relocation Expense Authorization (REA) form can be found under Forms/Instructions. Original receipts and supporting documents are required.
All Relocation Expense Authorization (REA) forms and requests for reimbursements to employees and direct payments to licensed, third-party commercial moving agents and/or other appropriate providers will be submitted to and reviewed by the Accounts Payable Department. The Accounts Payable Department, in consultation with the Payroll Department, has ultimate authority to determine taxability of reimbursements and the responsibility to insure that taxable (“nonqualified”) and non-taxable (“qualified”) payments receive appropriate processing and are reported correctly on the employee’s W-2 form.
This section is designed to provide guidance for situations where a department has received approval(s) to pay relocation and moving expenses. The approvals are documented on the Relocation Expense Authorization (used to encumber funds), agreed upon in the Relocation and Moving Expense Agreement, and included with the Official Offer of Employment letter for a newly hired employee. Payment of relocation and moving expenses for an existing employee of the University of Georgia requires completion of the Relocation and Expense Authority form and the Relocation and Moving Expense Agreement. Payments made to or on behalf of Foreign Nationals shall be in compliance with all applicable federal laws and all relevant visa restrictions and may require additional procedures. For further information regarding Foreign Nationals, please contact the International Tax Coordinator in the Payroll Office at 706-542-3431.
Payments made to reimburse the employee for relocation and moving expenses can either be taxable or non-taxable to the employee. This tax determination is made based solely on the Internal Revenue Service (IRS) regulations. IRS Publication 521 contains the regulations that will be used to determine taxability, and a link can be found under the Related Information section. Reimbursements will be included on the employee’s W-2.
The University cannot determine the specific impact of taxable payments/reimbursements on the employee’s tax liabilities. Employees should consult with their personal tax advisor as necessary.
I. Letter of Offer and Relocation and Moving Expense Agreement
II. Relocation Expense Authorization (REA) and Encumbering Funds
The hiring official(s) will determine which funding sources are available and will secure the appropriate approvals for each source before the official offer to pay Relocation and Moving Expenses is executed. The REA form collects the account number and approval of each funding source. Each REA form will contain a pre-printed control number or reference number for use in tracking and applying payments throughout the relocation/moving process.
Departments will submit the Relocation and Moving Expense documentation package to Accounts Payable including:
· Relocation Expense Authorization (REA)
· Executed Relocation and Moving Expense Agreement
· A copy of the signed Letter of Offer
All of these documents must be submitted to Accounts Payable before funds can be encumbered for relocation and moving expenses. In order to ensure prompt payments and reimbursements it is recommended that the REA form be submitted as early as possible. The REA and accompanying documents will be reviewed for completeness and evaluated for compliance with IRS rules and University policy.
Departments will work with the employee to complete moving arrangements.
III. Making Payments against the Encumbrance
The IRS has two general requirements for expenditures;
Payments to Vendors for Moving Services:
There are currently two ways to make payments directly to moving services vendors: A) Utilizing a contract vendor, and B) Utilizing a non-contract vendor. These methods are detailed below:
A) Utilizing a contract vendor: The University has established contracts with two moving services providers. When utilizing one of these contract vendors, the University will make payment directly to the vendor regardless of dollar value.
B) Utilizing a non-contract vendor: While employees are encouraged to utilize one of the contracted vendors, they are permitted to utilize non-contract vendors for household goods moves. Employees may elect to have their moving companies submit their invoice directly to the University in cases where the moving company's total bill does not exceed $24,999.99. The moving company should submit the invoice to the employee’s home department to be processed as described below. If Accounts Payable receives the invoice directly from the vendor, Accounts Payable will distribute the invoice to the department to be approved and processed as described below.
E-Verify Affidavits: A direct payment to a moving company that is $2,500.00 and over requires that the moving company complete an E-Verify Affidavits Form. This form is only needed for non-contract vendors. The completed form should be sent to Accounts Payable before the move begins to confirm that it has been completed correctly. Relevant E-Verify information may be found in a link below under the Related Information heading. National moving companies have local agents. If a local agent is used to move the employee, the local agent must be registered with E-Verify and complete the form.
Reimbursement to the Employee:
Employees may pay the expenses directly and apply for reimbursement. Reimbursement can be requested in one of two methods: 1) UGAmart Relocation and Moving Expense Payment Form, or 2) hard copy check request.
IV. Year End Reporting
All reimbursements will be reported on the employee’s W-2 for the year in which the payment was made. Reimbursement of nonqualified expenses will require the payment of respective Federal and State income taxes. For more information, see the IRS Publication 521link located under Related Information. In accordance with IRS guidelines, the University reports relocation and moving expense payments on a fiscal year basis that starts November 1st of the prior year and runs through October 31st of the current year. Relocation and moving expenses are recorded in the month paid rather than in the month that the expenses were incurred. For example, relocation and moving expense reimbursements paid from November 01, 2007 through October 31, 2008 will be reported on the 2008 W-2 Wage and Tax Statement.
Exception: Nonqualified (taxable) reimbursements paid through payroll have had income taxes deducted and are reported on the W-2 on a calendar year basis consistent with all other payroll payments. For example, a nonqualified payment paid on the November or December 2008 payroll will be reported on the 2008 W-2 because taxes have been withheld from the payment. Reimbursements for expenses after the cut-off date (November and December) would then be included on next year’s W-2; thus, a move that was completed in one calendar year may possibly have relocation and moving expenses reported in two different calendar years. An employee would then also receive two tax summary reports.
Accountable Plan: Under IRS guidelines, an Accountable Plan is one in which an employer’s reimbursement policy meets the following criteria:
Adequate Documentation: Examples of specific documentation requirements are listed below. Proof of payment is also part of the required documentation unless payment was made to the vendor directly from the University.
Household Goods: Personal property which may be transported legally in interstate commerce and which belongs to an employee and his immediate family at the time shipment begins. The term includes household furnishings, equipment and appliances, furniture, clothing, books, and similar property. It does not include property which is for resale or disposal rather than for use by the employee or members of his immediate family; nor does it include property intended for use in conducting a business or any other commercial enterprise.
Letter of Offer: A written agreement documenting the terms and conditions of employment between the new employee and the University and including the amount allocated for relocation and moving expenses. The Letter of Offer is part of the documentation package that must be sent to Accounts Payable before funds can be encumbered for any relocation and moving expenses.
Moving Advances: Cash advances to the employee for paying moving or relocation expenses. Cash advances are not allowed under The University of Georgia Relocation and Moving Expense Policy for Employees.
Nonqualified Moving Expenses: Mileage in excess of the standard IRS rate per mile for moving expenses, meals consumed while moving or living in temporary quarters, and house-hunting trips. These expenses will be reimbursed to the employee according to the limits in the signed Relocation and Moving Expense Agreement, but have personal tax consequences for the employee. Reimbursement of non-qualified expenses is subject to withholding of applicable income and employment taxes and these reimbursements will be reported on the employee’s annual Form W-2 as income.
Non-Reimbursable Moving Expenses: Expenses not specified in the University of Georgia Relocation Expense Policy for Employees. Non-reimbursable expenses may be paid with funds provided by a University foundation account and not by University accounts.
Qualified Moving Expenses: Expenses associated with packing, loading, hauling, insuring or temporarily storing property (no more than 30 days), unpacking, transportation and lodging during the move (excludes meals), and mileage at the standard IRS rate for moving expenses (see www.irs.gov).
Relocation and Moving Expense Agreement: An agreement to repay moving and relocation expenses if the employee remains in the employment of the University from the first day in the new position until twelve (12) months thereafter. The agreement should be made at the time of offering the position and then signed prior to an employee incurring expenses.
Relocation Expense Authorization (REA): A form to be completed by the hiring department prior to making an official offer to pay relocation and moving expenses documenting the account number and approval of each funding source to be encumbered for moving and relocation expenses. Each REA will contain a pre-printed control number for use in tracking and applying payments throughout the relocation/moving process.
Temporary Quarters: Lodging or housing in which the employee lives until a permanent residence is secured. Temporary quarters can consist of any type of lodging including hotels, motels, apartments or single-family dwellings. Per IRS guidelines, these expenses are classified as nonqualified, taxable moving expenses.
Responsible University Senior Administrator: Vice President for Finance & Administration
Responsible University Administrator: Associate Vice President & Controller
Policy Owner:Accounts Payable
Policy Contact: Andre Simmons
Phone Number: 706-542-6958
All expenses submitted for reimbursement must be actual, reasonable, necessary and within policy guidelines. Each employee eligible for moving and relocation reimbursement is responsible for:
Hiring department – Relocation and moving expenses and payment protocol, in accordance with this policy, must be discussed and finalized with the employee during the hiring process. Departments shall provide the employee with the written offer letter (which includes an amount for relocation expenses), will execute the Relocation and Moving Expense Agreement for Employees, determine the budget and funding sources for the expenses, complete and submit the Relocation Expense Authorization (REA) form to encumber funds, and complete and submit invoices and reimbursement requests to Accounts Payable for processing. Original receipts and supporting documents are required.
Accounts Payable - All REA forms and requests for reimbursements to employees and direct payments to licensed, third-party commercial moving agents and/or other appropriate providers will be submitted to and reviewed by the Accounts Payable Department. The Accounts Payable Department, in consultation with the Payroll Department has ultimate authority to determine taxability of reimbursements, and the responsibility to insure that taxable (“nonqualified”) and non-taxable (“qualified”) payments receive appropriate processing and are reported correctly on the employee’s W-2 form.
Research Grant Records
These records relate to funded research grant proposals and research activity associated with grant funded projects. Examples of records include: supporting statistics, demographic data, draft proposals, suggested revisions, final proposals, forms, protocols, applications, research/activity reports, progress reports, and summary reports.
Retention: Final research report is permanent. All other records: 7 years after the end of the grant period.
This series includes bank statements, purchase requests, purchase orders, requisitions, financial reports, accounts payable and receivable records, write-off records, discrepancy, payment schedules, operating statements, year-end projections, reconciliation and expenditure reports, cancelled checks, check stubs, moving expense records, cost accounting reports, refund/disbursement request records, returned checks, deposit slips, travel records, credit voucher requisition records, cash balances and reconciliations, sales and cash reconciliation records, journal entries, outstanding obligations, refund/disbursement requests, receipts and invoices.
Retention: Monthly and quarterly reports: 1 year. All other records: 5 years.
When the dean agrees to cover an amount for moving expenses in the offer letter, would this amount need to include any house hunting trips, or is house hunting treated separately?
House-hunting expenses are considered taxable “nonqualified" moving expenses per IRS guidelines. These expenses would be reimbursed under the University's relocation policy IF charges are incurred AFTER the offer letter and moving agreement are signed and if the charges do not exceed the amount agreed upon in the offer letter and moving agreement.
House hunting trips and other visits prior to the final move are allowable charges but are considered taxable and will be reported on the employee's W-2 as taxable income.
Are expenses to move an office or research lab part of the employee personal moving expenses?
Expenses for moving office and lab equipment may be paid or reimbursed by the University when agreed upon in writing in the Letter of Offer. These types of expenses are considered business expenses and are not included in the dollar amount offered to the employee to support moving the personal household. These services should be contracted for through the Procurement Office utilizing an UGAmart requisition prior to services being rendered. Please contact Procurement at 542-2361 for more information.
Why can’t I submit a check request for relocation expenses for a new employee electronically?
Payments for relocation and moving expenses can now be submitted electronically through UGAmart using the Relocation and Moving Expense Payment Form. Requests for payment through the electronic check request system are not allowed.
Does the University have any contracts with third-party movers or are there any companies that provide a discounted rate to UGA employees?
Yes, UGA has contracted with two moving service providers. For more information on the services they provide and their rates, please contact:
502-491-2807 extension 3326