 Greetings!
"Resolve to make at least one person happy every day, and then in ten years you may have made three thousand, six hundred and fifty persons happy, or brightened a small town by your contribution to the fund of general enjoyment." ~Sydney Smith
I LOVE this resolution! Every day, NRI is given the opportunity to make a difference in the lives of our customers and their transferring employees. We take every relocation personally and strive to improve their fund of general enjoyment! . Sincerely, Susan Bender |
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Is Your Relocation Program Compliant?
Beginning early this year the IRS has announced they are increasing the frequency and number of employment tax audits. One of their target areas is employee fringe benefits and expense reimbursements. Thus, it will be increasingly important for corporations to ensure they have the proper controls and procedures in place for classifying relocation benefits
and updating the employee wages during the year.
· Most relocation expenses are taxable and therefore should be included on the employee's W-2 in Box 1. Non-taxable expenses that have been reimbursed to the employee, like the shipment of household goods, etc. should be reported and coded appropriately in Box 12.
· Whether you gross up or not, taxes must be withheld from taxable relocation expense reimbursements. Taxes should be withheld at the time of reimbursement and not at year-end. If you are grossing up reimbursed deductible expenses, such as points and loan origination fees or interest payments on duplicate housing charges you are "over" compensating your employee.
· Loss on sale or directed offer payments over the current value of the home are 100% taxable.
· In order to deduct moving expenses, they must be incurred within one year from reporting to the new location. There are generally two exceptions to this rule: children are finishing the school year or the spouse is wrapping up an employment obligation. The IRS has not yet commented on the inability to sell a house as a valid exception.
These considerations are just a few basics about relocation taxation. NRI will help guide you to make sure that your policy and practices are in line with the rules regarding the treatment of relocation expenses. Contact us to discuss: 800-598-8887 | |
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Policy Update: Could the Homebuyer Tax Credit Cost You Money?
The Worker, Homeownership, and Business Assistance Act of 2009 has extended the homebuyer tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. It also authorized a tax credit of up to $6,500 for qualified repeat home buyers. To qualify, contracts must be signed by April 30, 2010 and closed by June 30, 2010.
If an employee has received a Homebuyer Tax Credit and is relocated within three years, he/she will need to repay the credit.
From IRS.gov : "If, within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full amount of the credit is due at the time the income tax return for the year the home ceased to be your principal residence is due."
This may be an unwelcome surprise to your employee who may look to you for assistance. Have you considered what you will do?
Contact NRI to discuss or to help modify your policy today! 800-598-8887
Click here for general information regarding the Homebuyer Tax Credit. | |
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Susan Bender
NRI Relocation
847-215-5000
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| Pass The Word! |
NRI is confident that we can wow new customers with the same personal service we provide to you and your transferees. We invite you to tell others about us so that they, too, can experience the difference.
They will find what other NRI clients have found -- that no other relocation company will give them the time, attention and VIP treatment that NRI does. Employee relocation is a people business and we put our people to the test daily to create a positive experience for our clients and their employees.
Please pass the word, and let NRI show them how it's done - when you trust a company that cares about your employees as much as you do.
We guarantee -- They will appreciate NRI's white glove service as much as you do!
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