![]() Non-employeesĪll amounts paid to or incurred for non-employees who are not students or stipend recipients will be reported on a Form 1099-MISC. Tax Reporting of Relocation Expenses EmployeesĪll amounts will be reported on the individual’s Form W-2, boxes 1, 3, and 5. Contact the Tax Department at for more information about reimbursements prior to appointment. Under no circumstances will a reimbursement be made prior to appointment if the reimbursement amount is less than $2,000 or within 60 days prior to the appointment date. When necessary to reimburse prior to appointment, the Waiver for Advance Payment must be completed. ![]() Payments prior to the appointment date are highly discouraged. Paying relocation expenses prior to appointment date, whether reimbursed or paid to a vendor on behalf of the individual, affects the type of tax reporting required and can result in unanticipated tax withholding. Note that reimbursements prior to an individual’s start date are unallowable on a sponsored fund. Therefore, reimbursements should not be made until the individual is an active employee. The method and effect of tax reporting is dependent upon whether the individual joins WU. This could delay the employee’s ability to complete their annual IRS income tax return or result in requiring the employee to file an amended return.Īs a matter of best practice, reimbursement or payments to third parties of relocation expenses for new employees before the individual is hired should be discouraged. Failure to report third party payments timely may also result in the issuance of a correction to the Form W-2, Form W-2C. Reporting these payments as soon as possible will allow the withholding to be spread over several pay periods if needed. This means that there will be additional withholding taxes deducted from the employee’s paycheck. ![]() In addition, payments for relocation expenses made to vendors on behalf of employees are taxable and must be reported to Payroll for inclusion on the employee’s Form W-2. Failure to report reimbursements timely results in delayed payment of expenses incurred by the employee out-of-pocket. Timing of Relocation ExpensesĪll relocation expenses, whether reimbursed to the employee or paid directly to vendors, should be submitted to the Tax Department on a Relocation Expense Form within 60 days of the individual’s appointment in Workday. If the individual is a non-employee, all amounts will be reported on a Form 1099-MISC. Please be aware that payments made directly to vendors are subject to payroll tax withholding.
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