Can I use relocation expenses toward a deductible if I have been reimbursed by my employer but have taxable expenses?

[abrenner319]

Hi, I was wondering if I could use my relocation expenses from my work related move as a deductible. I meet all of the requirements such as distance test etc. however, the relocation was paid for by my employer through a relocation assistance program. I had to front a lot of the cost and was reimbursed the full amount at a later date. On my paystubs and W2, it states that more than $2000 of these expenses are taxable. Does this mean that I can use the taxable expenses toward a deductible despite being reimbursed?

Thanks!

[DS30 · Accepted solution]

It depends.

When it comes to claiming deductible moving expense, you will not be able to claim a deduction for any reimbursed moving expenses unless these expenses are also included in your taxable income (Box 1 of your W-2).

For example, if your employer reports the moving expense reimbursement in Box 12, code "P" (related to exclusionary moving expense reimbursements) and also includes this reimbursement in your Box 1 income then you can claim deductible moving expenses related to this taxable reimbursement amount. You would also be able to claim any additional moving expenses for which you did not receive a reimbursement.

However, if your company reimbursed you for your moving expenses and did not include this amount in your taxable income on your W-2 then no moving expense deduction is allowed.. (In this case, since you are not recognizing the reimbursement as income, you are not allowed to take a deduction for these reimbursed expenses.)

Please refer to these links related to moving expenses: IRS - Moving Expenses and Moving Expense Deduction

If you have eligible moving expense, once you have signed into your TurboTax Account (for TurboTax Online sign-in, click Here), select "Take Me To My Return" and type "moving expenses" in the search bar then select "jump to moving expenses". TurboTax will guide you in entering this information

You will claim these moving expenses on Form 3903 and they will not affect your ability to claim a standard deduction.

[abrenner319]

Thanks for the reply. How can I tell if the moving expenses were included in my Box 1 total? The taxable moving expenses listed on my paystubs for the year is listed in Box 14 and the non-taxable reimbursed portion of the moving expenses is listed in Box 12 code P as you have stated. Both of these amounts have been reimbursed to me but the amount in Box 14 is considered taxable according to my paystubs. I only have one number for income in Box 1.

[DS30]

You may need to contact your employer to determine if any of your moving expenses are included in your taxable income (Box 1). Also, if your reimbursement was included with your pay, you can check the paystub that relates to that reimbursement and see if it was included as part of your taxable income.