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Relocation Expenses


Policy Statement

The sections of this policy include:

1.0   Eligibility

1.1   Written Letter of Offer

1.2   Relocation Expense Agreement

2.0   Payment/Reimbursement Rules and Guidelines

2.1   Documentation

2.2   Funding

2.3   Qualified and Nonqualified Expenses

2.4   Unallowable Relocation Expenses

2.5   Interview Expenses

2.6   Expenses for Moving Office and Lab Equipment

2.7   Employee Responsibilities

2.8   University Responsibilities

1.0 Eligibility

1.1 Written Letter of Offer

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 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:

  • Availability of Qualified Applicants – The employing department must determine that the employee is the best qualified applicant available for the position.
  • Full-time Position - The employee must be assigned to a full-time, salaried position and must have agreed to work on a full-time basis for at least one year. For faculty appointed on an academic year basis, one year is defined as two concurrent regular academic sessions of fall and spring or spring and fall semesters equal to nine months. For all other annual faculty and employees, one year is defined as twelve months.
  • Distance – the distance between the employee’s new work location and the former residence must be at least fifty (50) miles greater than the distance between the employee’s old work location and the former residence.
  • Time – The IRS regulations state that unless the employee works full-time at least thirty-nine (39) weeks during the first twelve (12) months after relocating, then all moving and relocation payments/reimbursements will be considered as taxable income.
  • If the employee’s spouse or partner is a State employee and otherwise eligible for moving and relocation expenses through the University or other State of Georgia agency, reimbursements of any moving or relocation expenses will be paid only once to move the primary household to the new location.
  • Relocation for current employees is allowable in situations where the employee is reassigned and the relocation is in the best interest of the institution. In such cases, approval of a Vice President is required and the following policy should be used: OPB Relocation Policy: http://opb.georgia.gov/sites/opb.georgia.gov/files/imported/vgn/images/portal/cit_1210/29/32/163225111policy%20memorandum_Intrastate%20reloc.doc

1.2 Relocation and Moving Expense Agreement

To be reimbursed for moving and relocation expenses, the employee must accept the Letter of Offer and execute a Relocation and Moving Expense Agreement (http://www.busfin.uga.edu/forms/relocation_agreement.pdf) with the University prior to incurring any expenses. No University obligation exists, nor may any reimbursements be processed, until all parties execute the agreement.

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, 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:

  • The employee must remain employed on a full-time basis for at least one year (twelve months), commencing on the date that the employee starts work at the University. For faculty appointed on an academic year basis, one year is defined as two (2) concurrent regular academic sessions of fall and spring or spring and fall semesters equal to nine (9) months of employment.
  • If the employee fails to remain employed for the obligated one year of service, the hiring department is required to immediately notify the Payroll department so that agreed upon deductions can be processed in a timely manner against remaining payroll payments. If payroll deduction of these expenses cannot be achieved, the employee will refund to the University the gross amount of moving and relocation reimbursed directly to the employee as well as the gross amount of any payments made for the benefit of the employee to third parties. The hiring department is responsible for collecting any refund from the employee which cannot be deducted in payroll processing. Unsuccessful efforts to collect the refund after thirty (30) days from the employee will be referred to the University Accounts Receivable Department for further collection efforts including referral to an outside collection agency if needed. Refunds collected through payroll deduction or directly from the employee will be returned to the original funding sources, including University foundations. Failure to repay these expenses as agreed due to the breach of contract may result in legal action to recover money being taken against the employee. As part of this agreement, the employee agrees to pay all collection costs including attorney fees and other charges necessary for the collection of any amount still due to the University.
  • Repayment of relocation and moving expenses by employees who do not remain employed for a full year, may be pro-rated or waived if the University employment is terminated for reasons beyond the employee’s control and found acceptable to the University. Any such waiver must be approved in writing by the employee’s Dean or Vice President and in the case of relocation and moving budgets of $15,000 or more, by the cognizant Vice President. Should the repayment be pro-rated, failure to repay the pro-rated amount may result in legal action to recover money being taken against the employee. As part of the agreement, the employee agrees to pay all the collection costs including attorney fees and other charges necessary for the collection of any amount still due to the University.
  • The IRS requires employees to work full time for at least thirty-nine (39) weeks during the first twelve (12) months after relocating in order to claim appropriate payments/reimbursements as non-taxable. Failure to meet this rule results in the employee reporting all relocation payments/reimbursements as taxable income.

 2.0 Payment/Reimbursement Rules and Guidelines

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.  If payment will be made directly to the third party moving company, the following applies:

Moving expenses that do not exceed $24,999.99 in total per vendor may be paid directly to the moving company by the University and will require an invoice from the third party commercial mover. For moves below $10,000 it is strongly recommended that the employee obtain a quote from the company prior to services being rendered.  For moves $10,000 to $24,999.99   it is preferred that the employee  obtain three (3) quotes from moving companies prior to the move and submit the quotes to the University as evidence that the company selected was providing services within a competitive cost range.

Moves of $25,000 or greater must be contracted for through the Procurement Office.  It is recommended that you contact the Procurement Office prior to submitting a purchase requisition in UGAmart for the expenditure.   

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 (see section II-b above). 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)     Documentation

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 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 section IV, definition of adequate documentation for additional details regarding meal reimbursements.

b)     Funding

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:

  • When using UGA restricted accounts funded by the University Foundation, the underlying fund agreement must allow for payment of relocation expenses.
  • Grant funding may be utilized only if allowed under the terms of the award or contract. Grants may include limitations on amounts for relocation expenses or may have limits on payment of certain types of relocation expenses. Any relocation expense charged to a grant account must meet the requirements of the grant and or the requirements of the funding agency or sponsor.
  • Conference and Workshop accounts, agency accounts, and student activity fee or technology fee accounts should not be utilized to pay relocation expenses.
  • Departmental Sales and Service accounts should only be utilized in those situations where the employee’s work is directly associated with the sales or service operation and when the expense can be supported by the budget of the operation.

c)     Qualified and Nonqualified Expenses

  • All direct payments to vendors and reimbursements to employees (both taxable and non-taxable) will be submitted to the Accounts Payable Department.
  • Payments will be made in accordance with the Internal Revenue Code and Internal Revenue Service Regulations. Relocation and moving expenses excluded from taxable income (“qualified expenses”) are defined as the reasonable cost of:
    • Moving household goods and personal effects from the former primary residence to the new residence (including the common carrier), and
    • Traveling (including lodging but not meals during the period of travel) from the former primary residence to the new place of residence.

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 (see Definitions) 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):

  • Commercial moving company
  • Packing/crating/mailing/shipping household goods,
  • Miscellaneous packing supplies that do not become the personal property of the employee i.e. padlocks or tools will not be reimbursed
  • Optional insurance on items such as furniture, clothing and utensils
  • Rental truck
  • In-transit storage for up to 30 consecutive days
  • Shipment of car(s), if not used in move
  • Travel and lodging costs for one trip per person (employee and household members) from the old residence to the new residence, which may include:
    • Mileage for moving per IRS limitations
    • Lodging in transit (UGA will reimburse in accordance with the State Travel Regulations)
    • Airfare (coach only)
    • Rental car (appropriate measures should be taken to obtain best value)
    • Tolls, taxi, shuttle service, or parking

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):

  • Travel and lodging costs incurred during additional trips from the old residence to the new residence
  • Cost of meals at any point in the relocation process (UGA will reimburse in accordance with the State Travel Regulations)
  • Mileage in excess of IRS limitations
  • House Hunting expenses (trips will not exceed five (5) days) may include:
    • Mileage per IRS guidelines
    • Lodging (UGA will reimburse in accordance with the State Travel Regulations)
    • Airfare (coach only)
    • Rental car (appropriate measures should be taken to obtain best value)
    • Tolls, taxi, shuttle service, or parking
    • Storage in excess of thirty (30) days but not to exceed six (6) months
    • Temporary quarters (UGA will reimburse for temporary quarters up to a maximum of six (6) consecutive months)

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. Moving expenses that do not exceed
$24,999.99 in total per vendor may be paid directly to the moving company by the
University and will require an invoice from the third party commercial mover. For moves
below $10,000 it is strongly recommended that the employee obtain a quote from the
company prior to services being rendered. For moves $10,000 to $24,999.99 it is
preferred that the employee obtain three (3) quotes from moving companies prior to the
move and submit the quotes to the University as evidence that the company selected
was providing services within a competitive cost range.

1) A direct payment to a moving company that is $2,500.00 and over requires that the moving
company complete an E-Verify form
(www.busfin.uga.edu/procurement/PDF/EVerifyForm.pdf). The completed form should be
sent to Accounts Payable before the move begins to confirm that it has been completed
correctly. E-Verify information may be found at http://www.uscis.gov/e-verify.
2) The E-Verify form is required for every direct payment to a moving company that meets the
$2,500.00 and over requirement. National moving companies, such as United Van Lines,
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.

Moves of $25,000 or greater must be contracted for through the Procurement Office. It
is recommended that you contact the Procurement Office prior to submitting a purchase
requisition in UGAmart for the expenditure. 

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.

iii) Mileage. 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.

iv) Tolls. Tolls paid during the move are reimbursable provided the name of the facility (road, bridge, tunnel, etc.) is provided on the receipt.

v) Storage. 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.

d)     Unallowable Relocation Expenses

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 “nonqualified” 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.

e)     Interview Expenses

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.

f)     Expenses for Moving Office and Lab Equipment

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. 

g)     Employee Responsibilities

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:

  • Assisting the department in completing the Relocation and Moving Expense Agreement for Employees;
  • Obtaining and submitting original receipts necessary to support all claims for reimbursement within sixty (60) days after paid or incurred;
  • Submitting claims for expenses that were incurred at least after execution of the Relocation and Moving Expense Agreement but in no case later than twelve (12) months following the first date of employment at the University of Georgia, unless the employee can show that circumstances existed to prevent moving within that time period;
  • Submitting claims for reimbursement on the Employee Request for Reimbursement of Relocation and Moving Expenses form (http://www.busfin.uga.edu/forms/relocation_reimbursement.pdf)
  • Adhering to the stipulations outlined in the Relocation and Moving Expense Agreement

h)     University Responsibilities

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 Authority 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 Relocation Expense Authority (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.

 

Reason for Policy

The purpose of this policy is to provide guidelines in accordance with the University of Georgia policies, the State of Georgia code, Internal Revenue Code provisions and Internal Revenue Service (IRS) regulations for reimbursement to employees for relocation and moving expenses and payment of relocation related expenses directly to vendors. Reimbursements and direct payments should comply with state and federal regulations. Relocation and moving expenses for faculty and staff may be provided if funds are available in the department or school/college/unit budget. Payment or reimbursement of personal relocation and moving expenses for existing employees is allowable if the relocation creates an advantage for the University of Georgia and has been appropriately approved. In the case of existing employees, the policies outlined by the State of Georgia Office of Planning and Budget should be followed. These policies are available at: http://opb.georgia.gov/intrastate-relocation-expenses-state-employees. Individuals receiving the benefit of relocation and moving expenses should be aware of any personal income tax implications and should consult a tax professional with personal tax questions.

Procedures

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 Authority form (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. The publication can be found at: http://www.irs.gov/pub/irs-pdf/p521.pdf . 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.

Procedure Steps:

I. Letter of Offer and Relocation and Moving Expense Agreement

II. Relocation Expense Authority and Encumbering Funds

III. Making Payments against the Encumbrance

Payments to Vendors

Reimbursement to the Employee

IV. Year-End Reporting

I. Letter of Offer and Relocation and Moving Expense Agreement

  1. The hiring official(s) will execute a Letter of Offer and a Relocation and Moving Expense Agreement with the employee. These forms may be found on the Administrative Forms Web Site: http://www.busfin.uga.edu/forms. The Relocation and Moving Expense Agreement will be signed by the employee, Department Head, and Dean or Vice President. For relocation and moving expense budgets of $15,000 or more, Vice President approval is required and the cognizant Vice President must sign the Relocation and Moving Expense Agreement.
  2. The hiring official(s) should provide the employee with a copy of the University’s policy on relocation and moving expenses as it outlines the tax implications of these expenses. 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.

II. Relocation Expense Authority 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 Relocation Expense Authority (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. This form can be located at: https://busfin1.busfin.uga.edu/accounts_payable/relocation_authority.cfm

  • Departmental funds must be approved by the department head with budgetary responsibility for the state account,
  • UGA Foundation funds must be approved by the appropriate dean or vice-president as required by the respective fund agreement and then sent to the External Affairs Office of Financial Services for approval,
  • UGA Research Foundation funds must be approved by the Office of the Vice President for Research Director of Fiscal Affairs,
  • Funds provided through the Office of the Vice President for Academic Affairs must be approved by the Provost.
  • Grant funds must be approved by the project’s principal investigator (PI), the department head, and the Contracts & Grants department.

Departments will submit the Relocation and Moving Expense documentation package to Accounts Payable including:

· Relocation Expense Authority (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. 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;

  • Moving expenses must be incurred within one year from the date the employee first reported to work and,
  • Moving expenses must be submitted to the employer for payment or reimbursement within sixty (60) days after they were incurred or paid.

Payments to Vendors

1. 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.

  • The original receipt or invoice and any other supporting documentation should be attached to a check request and an Employee Request for Reimbursement of Relocation and Moving Expenses form should be completed. The standard check request number will be augmented by having the departments write in the REA number below the check request number. The document package should be submitted to Accounts Payable.
  • Accounts Payable will review for completeness and determine the tax status of the payment.
  • Accounts Payable will process the invoice for payment and reduce the REA encumbrance.

Reimbursement to Employee

Employees may pay the expenses directly and apply for reimbursement.

1. The employee should attach original receipts and any other supporting documentation to a Check Request and complete a Request for Reimbursement of Relocation and Moving Expenses form. The standard check request number will be augmented by having the departments write in the REA number below the check request number. The document package should be submitted to Accounts Payable.

2. Accounts Payable will review for completeness and determine the tax status of the reimbursement.

3. Accounts Payable will process the invoice for payment. Non-taxable payments processed through the Accounts Payable system will automatically reduce the encumbrance. Any payments that are determined to be taxable will be processed through payroll and the REA encumbrance will be reduced at the end of the pay period.

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 IRS Publication 521 at: http://www.irs.gov/publications/p521/ar02.html#en_US_publink100043419. 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.

Forms/Instructions
Policy Definitions

Accountable Plan: Under IRS guidelines, an Accountable Plan is one in which an employer’s reimbursement policy meets the following criteria:

  • Expenses paid or incurred must have a business connection
  • Employees must adequately account for expenses within a reasonable period of time (sixty (60) days) after they were incurred.
  • Any excess reimbursement or allowance must be returned within a reasonable

period of time.

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 moves completed by a 3rd party moving company – bill of lading; detailed invoice or receipt;
  • Moving vehicle rental – vehicle rental agreement and receipt;
  • Labor during the move - receipt from the business engaged to provide labor, with signature and tax identification number and amount paid; limited to a reasonable hourly wage with the maximum total payment of $500 per move; labor provided by the employee or the employee’s immediate family member(s) is not reimbursable;
  • Airplane tickets – airline ticket “receipt” coupon and/or equivalent printed receipt for e-tickets;
  • Lodging – itemized hotel bill;
  • Auto rental – auto rental agreement;
  • Auto mileage – actual mileage as recorded by the odometer or mileage can be obtained from the MapQuest internet web site (http://www.mapquest.com);
  • Auto fuel and oil – original receipts for fuel and/or oil. Fuel and oil expenses are not reimbursable if the employee is claiming reimbursement for mileage;
  • Storage & shipping – original itemized receipt or bill;
  • Utility connect & disconnect – original receipt or bill;
  • Meals – cost of meals at any point in the relocation process will be reimbursed in accordance with the State Travel Regulations. 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. For the first and last day of travel, only seventy-five (75) percent of the per diem rate is allowable. Per the U.S. General Services Administration (GSA) which establishes the federal per diem rates, each family member is entitled to a different percentage of the applicable per diem rate on the days they are eligible.
    • Employee - 100% of rate;
    • Spouse - 75% of rate (100% if traveling separately from spouse);
    • Children over 12 - 75% of rate;
    • Children under 12 - 50% of rate

Any unusual items or special circumstances causing a policy deviation should be fully explained on an attached, signed memorandum and properly approved by the department. Detailed receipts showing items purchased may be submitted in lieu of per diem amounts. Purchases of alcoholic beverages are not allowed on institutional funds and will not be approved for payment;

  • House hunting – original receipts or other appropriate documentation;
  • Temporary living – original hotel bill or short-term lease agreement for temporary lodging; brief explanation stating the purpose for temporary living; and,
  • Other – original bill or receipt.

Household: Includes any members of the employee’s household or dependents residing in the household and/or moving to the new location.

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: Actions taken to change a place of primary or permanent residence.

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.

Moving Expenses: Expenditures for transporting the employee, members of employee’s household, household goods and personal effects from the former residence to the new residence.

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.

Personal Residence: A house, condominium, townhouse or rental property (e.g. apartment, flat) where the employee’s primary household is maintained on a permanent basis.

Primary Household: Household goods and personal effects, which are maintained at the employee’s main place of residence.

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: The process of assigning, establishing, and/or settling in a particular place for employment purposes.

Relocation Expenses: Expenditures other than moving expenses incurred in the process of relocating the employee and household.

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 Authority (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.


 

 

Responsibilities

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

Employee Responsibilities:

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:

  • Assisting the department in completing the Relocation and Moving Expense Agreement for Employees;
  • Obtaining and submitting original receipts necessary to support all claims for reimbursement within sixty(60) days after paid or incurred;
  • Submitting claims for expenses that were incurred at least after execution of the Relocation and Moving Expense Agreement but in no case later than twelve (12) months following the first date of employment at the University of Georgia, unless the employee can show that circumstances existed to prevent moving within that time period;
  • Submitting claims for reimbursement on the Employee Request for Reimbursement of Relocation and Moving Expenses form (http://www.busfin.uga.edu/forms/relocation_reimbursement.pdf)
  • Adhering to the stipulations outlined in the Relocation and Moving Expense Agreement

University Responsibilities:

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 Authority 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 Relocation Expense Authority (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.

Record Retention

For expenditures processed with grant funding, all documentation should be retained for the life of the grant plus seven (7) years. 

Documentation of expenses charged to a University Purchasing card may include applications, master monthly billing statements, individual card holders’ statements, billing summaries, printouts including vendor analysis by code, number of charges and stores, use summaries and related correspondence.  Documentation must be retained for seven (7) years.

For all other expenditure types, records may include but are not limited to:  check requests, purchase orders, invoices, journal vouchers, departmental requisitions, justifications of purchases, payment authorizations, reports of receipt of goods or services, and related documentation and correspondence.  Retention is five (5) years.  Reference O.C.G.A. 11-2-725. 

Policy Appendices
FAQs

Q. 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?

A. 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.

Q. Are expenses to move an office or research lab part of the employee personal moving expenses?

A. 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.

Q. Can we reimburse a new employee for the moving company expenses that he/she pays out-of-pocket or is it required that the moving company send an invoice directly to UGA?

A. 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.  If payment will be made directly to the third party moving company, the following applies:

Moving expenses that do not exceed $24,999.99 in total per vendor may be paid directly to the moving company by the University and will require an invoice from the third party commercial mover. For moves below $10,000 it is strongly recommended that the employee obtain a quote from the company prior to services being rendered.  For moves $10,000 to $24,999.99 it is preferred that the employee obtain three (3) quotes from moving companies prior to the move and submit the quotes to the University as evidence that the company selected was providing services within a competitive cost range.

Moves of $25,000 or greater must be contracted for through the Procurement Office.  It is recommended that you contact the Procurement Officer prior to submitting a purchase requisition in UGAmart for the expenditure.  

Q. Why can’t I submit a check request for relocation expenses for a new employee electronically?

A. Payments to third-party moving companies or reimbursements to employees for relocation and moving expenses can either be taxable or non-taxable to the employee based on the Internal Revenue Service (IRS) regulations. Taxable payments must be processed separately through the payroll system in order for UGA to withhold applicable taxes from the taxable “nonqualified” payments.

Q. Does the University have any contracts with third-party movers or are there any companies that provide a discounted rate to UGA employees?

A. UGA does not currently have any contracts with moving companies; however, employees may utilize agreements negotiated with Allied Van Lines and United Van Lines by Educational and Institutional (E&I) Cooperative Purchasing. More information can be found at: https://www.eandi.org/. Click on the link for either Allied or United to review find additional information regarding local agents for each of these vendors.

In addition, the University of Georgia’s Human Resources website that has a link for moving services at http://www2.beneplace.com/uga

Related Information