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Moving Expenses


Moving expense policy

The University adheres to IRS regulations for accounting and reporting of moving expenses. There are two methods to handle moving expenses:

  • reimbursement of expenses, and
  • moving expense advance.

IRS regulations

Effective January 1, 2018, all  moving expenses are taxable, including payments from the University to a third party on behalf of the employee (e.g. payments to a moving company).   To be considered for reimbursement, all moving expenses must be related to starting work at a new job. 

Reimbursement defined

A reimbursement of substantiated expenses incurred by relocating employee and approved by the hiring department.

Moving advance defined

An advance provided to a relocating employee to assist with payment of expenses related to relocation.

Note: Advances are limited to 90% of the department authorized relocation costs (as stipulated in the offer letter) and must be substantiated within 30 days of relocation.

Hiring department responsibilities

The hiring department approving the relocation generally bears the costs. An offer letter must be sent to the new employee by the cognizant vice president, dean or director stipulating the terms of authorized relocation costs. A copy of this letter must be attached to the Authorization for Payment form and must specify:

  • the expenses to be reimbursed and the maximum amount to be paid by the University,
  • a statement indicating that some expenses may be subject to tax reporting and withholding, and
  • insure moving advances are properly substantiated in accordance with procedures below.

Note: Personal and/or confidential information (i.e., social security number, salary, etc.) should be masked on the offer letter submitted with the Authorization for Payment.

Moving expense procedure: reimbursement

Follow the procedure below for moving expenses utilizing the reimbursement method:

 
Step     Action
1 Responsible University official determines what will be reimbursed and maximum amount that will be paid by the University.
  Note: Vice presidential or dean approval is required for amounts >$5,000.
2 Letter is sent by responsible university official explaining terms of offer.
3 Move completed.
4 Authorization for Payment form is prepared and submitted to Payroll within 30 days of relocation along with original receipts. Commodity code A178-Employee Relocation & Moving Expense (account code 7178) is charged for expenses.
  Note: In order to better track relocation expenses A178 is used even when reimbursing for airfare, temporary lodging, meals, packing materials, etc.
5

The Payroll Department determines taxability and forwards the Authorization for Payment form to the Accounts Payable Department.

Moving expense procedure: moving expense advance

Advances will not be processed in excess of 45 days before the move.

Follow the procedure below for moving expenses utilizing the moving expense advance method:

 
Step     Action
1 Responsible University official determines what will be reimbursed and maximum amount that will be paid by the University.
  Note: Vice presidential or dean approval is required for amounts >$5,000.
2 Letter is sent by responsible University official explaining terms of offer.
3 Department prepares Authorization for Payment form in amount equal to 90% of amount of relocation expenses in offer letter. Charge the appropriate index code and commodity code T390 Advances (account number 7158).
4 Responsible University official signs the Authorization for Payment form.
5 Submit the Authorization for Payment form and copy of offer letter to Accounts Payable.

Note: Personal and/or confidential information (i.e., social security number, salary, etc.) should be masked on the offer letter submitted with the Authorization for Payment.
6
Move completed.
7 Department submits an Authorization for Payment form (see procedures above) within 30 days of relocation, attaches original receipts and deducts the amount of the moving expense advance on the Authorization for Payment form (charging commodity code T390).

Note: By accepting a moving expense advance, the employee authorizes the University to add the amount of any unsubstantiated advances to the W-2 as taxable income subject to withholding for FICA, FIT, SIT, and SDI taxes.
8 Accounts Payable shares a copy of the Authorization for Payment form with the Payroll Department.
9 The Payroll Department determines taxability and takes appropriate action.

Information available on the Internet

The following forms are available on the Internet at http://web.pacific.edu/x8084.xml:

  • Authorization for Payment form

Additional information

Contact the Payroll Department for additional information.

About This Policy
Last Updated
4/23/2018
Original Issue Date
7/1/2007

Responsible Department
Controller


Authorization for Payment Form