Moving, Recruiting and Related Expenses for Harvard Employees

General Information

• Recruitment, moving and related expenses for employees and non-employees are
  authorized at the department level
  
• A commitment to pay for such expenses should not be made without first consulting
  the Dean, Vice President or Department Head for approval
  
• Certain moving and storage expenses for employees' personal property are taxable
  per the Internal Revenue Service (IRS)

Recruitment Expenses

Employee Moving and Related Expenses

• Outside US
• Inside US

Qualified Employee Moving Expenses

Non-Qualified Employee Moving Expenses

Non-Employee Moving and Related Expenses

Additional Information and Questions

Related IRS Publications and Forms

Standard Mileage Rates from the IRS

Recruitment Expenses

Before an offer is accepted:

Payment of authorized recruitment expenses such as airfare, hotel, and meals incurred
during the recruitment process is not taxable to the prospective employee. A detailed
accounting of all recruiting expenses is required.

After an offer is accepted:

After an offer of employment has been accepted however, the employer/employee
relationship is established and pre-move house hunting expenses incurred by the
employee and family are considered taxable/reportable income.

Reimbursement of Recruiting Expenses:

• For job candidates and their families prior to acceptance of a job offer
  
  • Use Universal Expense Form

Third Party Recruiting Expenses:

• For job candidates and their families prior to acceptance of a job offer
  
  • Use Web Voucher

Employee Reimbursements or Third Party Payments:

• After an individual has accepted an offer of employment and prior to the new employee's start date
  
  • Use Universal Expense Form
    
  • Clarify purpose of payment in the description field
    
• After an individual has started employment
  
  • Use PeopleSoft Additional Pay Form
• All payment requests must include acceptance date

Standard Mileage Rates from the IRS

• http://www.irs.gov/newsroom/article/0,,id=240903,00.html

Employee Moving and Related Expenses

Harvard is obligated to report qualified and non-qualified moving and storage expenses
for employees' personal property both to the IRS and the Massachusetts Department of Revenue, as follows:

Qualified Moving Expenses

Paid to employees:

• Reported to the IRS for informational purposes
  
• Not taxable income

Paid to a third party on behalf of an employee:

• Not reported to the IRS
  
• Not taxable income

Types of Qualified moving and related expenses:

• Packing and crating of household goods and personal effects
  
• Transportation of household goods and personal effects, including pets and automobiles, from former residence to new residence. When using auto to move, reimburse either the standard mileage rate or actual expenses for gas, tolls, etc. Contact Tax Services for current mileage reimbursement rate);
  
• Insurance and in-transit storage for periods of up to 30 days from the time household goods are moved from the former residence to the new residence;
  
• One trip for employee and household members. Travel must be via the shortest and most direct route from the former residence to the new residence. Employee and household members do not have to travel at the same time;
  
• Lodging while en route for the employee and household members (including date of arrival) from the former residence to the new residence. Also included is one day's lodging in area of former residence if former residence is not suitable for occupancy due to the move.

Non-Qualified Moving Expenses

Paid to employees:

• Reported to the IRS on the employees' W-2 (all appropriate federal, state and Social Security taxes are withheld)
  
• Considered taxable income

Types of Non-qualified moving and related expenses:

• Pre-move house hunting, including travel, meals, and lodging after a job has been accepted
  
• Meals consumed during a move and while in temporary quarters and during pre-move house hunting trips
  
• All temporary quarters expenses except those listed above in lodging while en route
  
• In-transit storage charges beyond the 30 day limit
  
• Personal needs such as a driver's license and auto insurance
  
• Real estate fees incidental to leaving the employee's former residence and acquiring the new residence (points, broker's fees, etc.)

Employee Reimbursements or Third Party Payments:

• Submit a PeopleSoft Additional Pay Form to Payroll
  
• All payment requests indicate whether the expense is Qualified or Non-qualified
  
• Indicate whether gross up is required

Non-Employee Moving and Related Expenses

Moving and related expenses for individuals receiving grants or fellowships and who are not Harvard employees are treated and reported in the same manner as their grant/fellowship payments:

• For U.S. citizens or Resident Aliens the University has no withholding/reporting requirements
  
• For Nonresident Aliens amounts will be included on Form 1042-S

Paid to non employee Post Docs:

• Use both Web Voucher and Universal Expense Form

Paid to Third Party:

• Use both Web Voucher and Universal Expense Form

Additional Information and Questions

Effective 1/1/98, the Commonwealth of Massachusetts follows IRS guidelines for moving and storage expenses.

Contact Tax Services for information and questions regarding moving and related expenses.