Prompted by changes in IRS tax guidelines, which no longer allow employers to pay moving expenses on behalf of new employees without tax consequences, UT Dallas has updated its practices for helping new employees offset moving costs.
Travel & One Card is available to work with Hiring Departments to offer new employees a flat relocation payment for distribution during the month prior to their start date. This one-time payment, approved by the Dean or Vice President, must be specified in the Letter of Offer. Upon acceptance by the new hire, Hiring Departments should submit the fully-signed Letter of Offer and funding instructions to Travel & One Card, which then distributes the relocation payment to the employee.
It is strongly recommended that the Letter of Offer require at least a year of service for retention of the relocation payment, and note clearly that the entire amount will appear as taxable income on the employee’s W-2, as no taxes are withheld at time of payment.
While Purchasing will continue to supply a listing of trusted moving companies, no payments to moving companies will be made on a new hire’s behalf going forward. Instead, the employee may use the relocation payment at their discretion for any relocation-related costs, including moving, house-hunting travel, temporary lodging and other expenses.
These changes allow UT Dallas to provide a relocation benefit in accordance with current tax laws, while offering new employees more freedom to make their own decisions during a move.
Please contact Payroll (payroll@utdallas.edu) or the Travel & One Card office (travel@utdallas.edu) with any questions.
