2018 tax law for reimbursed expenses related to moving. Box 12a "P" vs letter "L"????

[trenise8580]

My employer provided W2 with a box 12a "P" for moving expenses. I heard that moving expenses are taxable in 2018 but only if they are part of an "unaccountable plan." Does this apply to reimbursements that I paid for and have receipts for and that were reimbursed? If so, am I getting double taxed on box 12 P for "reimbursed" moving expenses now? 

I paid X amount from my already taxed income to pay for a moving company. My employer repaid me the expense and put it in box 12a as a P. Under the new tax law is this now taxable income? So am I getting taxed on already taxed income that I used to pay for moving and got reimbursed for by my employer? Or does the employer have to change box 12 a from P to L? 

For an example's sake. I paid $5000 of my taxed income to pay the movers. I provide the receipt to my employer. The employer repays me the $5000. Is that now taxable income? Am I getting taxed on reimbursed taxed income that was used for moving???? So confused please help!  

[macuser_22]

Are you military?
W-2 code P moving expenses are only deductible in 2018 if you are military and meet the requirements, unless the move took place in 2017 and were not reimbursed until 2018.   Moving expenses for non-military were eliminated for 2018-2025.

[trenise8580]

Not military. P seems to have to be fixed to L in box 12a

[macuser_22]

What do you mean?  Is it a L or a P in box 12?

[trenise8580]

L is a letter code for non-taxable reimbursements by the employer. P is now a letter code for moving expenses repaid for the military. I am figuring out with the guy below that as long as is was a reimbursed expense with receipts and not an allowance that is still seems non-taxable. Therefore might need letter code L in box 12a

[macuser_22]

You cannot change anything on your W-2.  The IRS gets a copy from your employer and what you report must match that.

Quote
Code L—Substantiated employee business expense reimbursements. Use this code only if you reimbursed your employee for employee business expenses using a per diem or mileage allowance and the amount that you reimbursed exceeds the amount treated as substantiated under IRS rules. See Employee business expense reimbursements.

For more information on accountable plans,
nonaccountable plans, amounts treated as substantiated
under a per diem or mileage allowance, the standard
mileage rate, the per diem substantiation method, and the
high-low substantiation method, see Pub. 463, Travel,
Gift, and Car Expenses; and section 5 of Pub. 15 (Circular
E).
end quote

Code L is NOT for moving expenses.

As stated below IF the move took place in 2017 and it is reported by your employer on a 2018 W-2 then you can still claim it if non military.     Pursuant to  IRS Notice 2018-75. <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-drop/n-18-75.pdf">https://www.irs.gov/pub/irs-drop/n-18-75.pdf</a>

If the move took place in 2018 and you are non-military then the W-2 is in error and your employer needs to issue a corrected W-2.

[macuser_22]

Also see the 2017 IRS Pub 521 for moving expenses under accountable plans on page 9 & 10.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p521.pdf">https://www.irs.gov/pub/irs-pdf/p521.pdf</a>

quote
You meet accountable plan rules. If for all reimburse-ments you meet the three rules for an accountable plan (listed earlier), your employer shouldn't include any reim-bursements of expenses in your income in box 1 of your Form W-2, Wage and Tax Statement. Instead, your em-ployer should include the reimbursements in box 12 of your Form W-2 with code P.
end quote

Under an accountable plan in 2017 a code P is required, not L.  For 2018 that only applies to military.

[trenise8580]

Of course I wouldn't change the W2...I can't! You didn't give me a straight answer and your quote of the IRS publication does not apply to me. I just need a straight answer here. Are reimbursed expenses baked by receipts taxable income on a w2 or should they be excluded from a w2? If they are taxable, they would be taxed twice as the expenses have been paid with already taxed income... I talked to turbo tax CPA and he said it is not taxable and that my w2 needs to be changed to either leave the reimbursement out or change it to letter L. but just wanted to make sure here as I don't want to deal with the IRS for a mistake my employer made...

[macuser_22]

If your employer determines that the expenses meets the IRS requirements under code L in the W-2 instructions and associated publications,  and changes the code then you should not have any problems with the IRS, but of course, the IRS can challenge anything on a tax return that they believe might be questionable.   

You can be required to prove anything that you put on a tax return.  The IRS also randomly selects tax return for random audit so it is not possible to say if the IRS would question it or not.  All you can do is file a correct tax return using a W-2 provided by the employer.

[trenise8580]

OK, so I called the IRS and they said it is NOT taxable income if it was prepaid by the employee and was re-imbursed on already taxed income providing receipts. The IRS recommended changing the letter P to L. Now hopefully this helps some folks and hopefully the IRS knows their stuff...

[PhyllisG · Accepted solution]

Under the old tax law, if your employer has an accountable plan in place (requirement to provide receipts, invoices, etc.) then those expenses were not considered as taxable income even if they were reimbursed.

However, if your employer did not have an accountable plan, and he reimbursed you for your moving expenses, the reimbursement was considered as taxable income to you.

Under the Tax Cuts and Jobs Act, employers may still reimburse employees for their moving expenses, but  the reimbursement is now considered as taxable income except for members of the Armed Forces and their families. 

However, if the move occurred prior to January 1, 2018 but wasn't paid until 2018, then the reimbursement will not be taxable.

[trenise8580]

I had to provide receipts for everything so I did NOT get a certain amount for moving that I could use as I pleased. I only get money back for receipts I provided within 30 days of the payment for the move. S this is an accountable plan???

[trenise8580]

I had to provide receipts for everything so I did NOT get a certain amount for moving that I could use as I pleased. I only get money back for receipts I provided within 30 days of the payment for the move. S this is an accountable plan???

[PhyllisG]

Yes.  Accountable plan means providing proof that the expense was incurred.  It is different from a moving allowance.

[trenise8580]

Ok, so under the new tax law reimbursed receipts are still non-taxable income? Even moving related? Thanks