US Tax Reform and Employee Relocation

With the sweeping tax reform bill signed by President Trump, there was a major change in how employee relocation benefits are taxed.

With this new tax bill, relocation expenses will be deemed a taxable benefit to the employee even if the various costs are paid by the corporation.

Likewise, a person moving to a new job location who is paying for the move themselves will not be able to claim relocation expenses on their personal taxes.

These changes could have a large impact to the relocation industry as it will drive up costs as the corporation will probably “gross up” an employee’s income to pay for the tax consequences of their relocation.

It will be interesting to see how this impacts the amount of employee relocations per year or if the corporation reduces other relocation benefits to reduce their costs.