Tax Tip 2018-192
December 12, 2018
For businesses that have employees, there are changes to fringe benefits that can affect a business’s bottom line and their employee’s tax liabilities. One of these changes is to qualified moving expenses.
Under previous law, payment or reimbursement of an employee’s qualified moving expenses were not subject to income or employment taxes.
Under last year’s tax reform legislation, employers must include all moving expenses, in employees’ wages, subject to income and employment taxes.
Generally, members of the U.S. Armed Forces can still exclude qualified moving expense reimbursements from their income if:
There is a transition rule under the new law. Under this rule, certain payments or reimbursements aren’t subject to federal income or employment taxes. This includes amounts that:
Employers who have included amounts covered by the exception or the transition rule in individuals’ wages or compensation can take steps to correct taxable wages and employment taxes.
Circular E: Employer’s Tax Guide
Instructions for Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund
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