How Do I Report Income from Employee Relocation Expenses on a W-2 Form?

Report the financial assistance that you pay any relocating employees for their move with their wages on a W-2 form. The Internal Revenue Service previously suspended excluding payments from wages for qualified moving expense reimbursements. Exceptions to the tax law relate to an active member of the U.S. Armed Forces or moves prior to Jan. 1, 2018.

An employee’s moving expenses and any lump sum payments fall under the category of taxable income. Employees must pay federal and possibly state income tax on your provided income for any relocation cost. Treat the money that you give to cover all or a portion of your employees’ moving costs as a business expense. Deduct the total amount that your business paid from the company’s taxes.

We handle income reporting for employee relocation programmatically with our W-2/1099 Forms Filer software. Download our free demo software today to calculate selected fields and import all company data from a variety of sources.

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