|STATE OF CONNECTICUT|
THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106-1775
MEMORANDUM NO. 95 - 26
April 28, 1995
TO THE HEADS OF ALL STATE AGENCIES
|Attention:||Chief Administrative and Fiscal Officers, Business |
Managers, and Payroll and Personnel Officers
|Subject:||Reimbursement of Moving Expenses|
To clarify accounting procedures in processing moving expense reimbursements.
Internal Revenue Code (IRC) Section 82, "Reimbursement for Expenses of Moving", states: Qualified moving expenses reimbursed by an employer are excludable from the recipient employee's gross income as a qualified fringe benefit if the expenses were incurred after December 31, 1993. Qualified moving expenses are those that would be deductible by the employee as a moving expense if directly paid or incurred by the employee. After 1993, qualified moving expenses include only the reasonable costs of moving household goods and personal effects from the old residence to the new residence and the reasonable costs of traveling, including lodging, from the old residence to the new residence.
Reimbursements for moving expenses that are not qualified moving expenses incurred after December 31, 1993 will be included in the employee's gross income as compensation for services.
Payments to third parties are deemed "indirect" reimbursement and are excludable from the receiptant employee's gross income.
Qualified moving expenses include only: (1) the reasonable expenses of moving household goods and personal effects from a former residence to a new residence and (2) the reasonable expenses of traveling (including lodging) from a former residence to a new place of residence.
The reasonable expenses of moving household goods and personal effects include the actual charge for transportation of household goods and personal effects, charges for packing, and charges for "in-transit" storage. This also includes the cost of transporting the employee's car or pet.
The reasonable expenses of traveling include only one trip made by the employee and members of his/her household. It is not necessary that they all travel together or at the same time. If the employee uses his own car for transportation, he/she may use actual out-of-pocket expenses (gasoline, oil, repairs, etc.) provided that an adequate record is kept to verify the expenses, or he/she may compute his expenses at a rate of nine cents a mile for calendar years 1994 and 1995. A schedule verifying the mileage must be provided to the employer.
The cost of meals is not a qualified moving expense.
If the employee uses his own car for transportation certain costs such as repairs for damage suffered in a car accident en route, insurance costs, or depreciation on the car used in the move are nonqualified expenses.
All moving expense reimbursements are to be paid through the payroll system, except for third party payments on behalf of an employee. Only qualified moving expense reimbursements are not subject to withholding, taxes or retirement contributions. A separate payroll check will be issued.
Nonqualified moving expense reimbursements are subject to withholding, taxes and retirement coding/contributions, where applicable. Reimbursements for nonqualified moving expenses made to members of the Teachers, Judges and Compensation Commissioners', State's Attorneys', and Public Defenders' Retirement Systems are not subject to retirement coding/contributions.
The D/OE code "1P" Moving Expenses is to be used for the processing of qualified moving expense reimbursements only.
The new D/OE code "2L" Meals Moving Expenses is to be used for the processing of nonqualified moving expenses only.
Moving Expenses - R3; Amount; D/OE Code "1P".
Meals Moving Expenses - R3; Amount; D/OE Code "2L".
Questions may be directed to the Office of the State Comptroller as follows:
Forms and On-Line: Central Payroll Division, 566-5428
Remote Job Entry: Financial Information Systems Bureau, 566-3214
Accounting Systems Division, 566-5337
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