My company paid a third party for all my relocation expenses and reported this in the W-2 box 1. This amount is also included in Box 16 of CA?

[aays2]

 

I have received the 2020 W2 from my company with all my relocation expenses reported in the box 1. I understand this is correct, since they are taxable. However they have hired a third party, and not paid me directly. So a company was responsible for paying all my relocation expenses (i.e. moving household goods, transportation, etc.). This amount will also be included in box 16 of W-2? Do I have to pay CA state tax on this amount?

[MaryK4]

Yes, this is considered taxable income, mostly because the Moving Expenses deduction does not apply in 2021 (if it did you would be able to reduce the amount of the income by your moving expenses).  Regardless of if it was paid directly to you or a third party, because you received the benefit of the service, you must pay the tax on the amount as income.

California still allows the moving expenses deduction- in TurboTax, you will want to look for the Moving Expenses in Deduction and Credits in the Federal Taxes section and complete the information- it will transfer to the California tax return.

[aays2]

Thanks @MaryK4 . So this relocation expenses are already added in my state tax income in box 16 of W-2?

[LenaH]

Yes. The amount on your W-2, Box 16, includes the total amount of benefits you received from your employer. Please ensure you enter your relocation expenses for California into TurboTax using the steps described above. 

@aays2

[adam61]

What if does not appear on my W2?

[AmyC]

It should be in your box 1 wages with taxes increased to cover the amount. You may want to contact HR to verify the benefit you received. 

@adam61

[adam61]

Thanks! And what should I do if the amount was not covered in Box 1?

[DaveF1006]

To clarify, did your employer reimburse you for your relocation expenses?  Regardless, if you paid for these out of your own pocket, you can still deduct these if your state (such as Ca) allow a deduction for employee business expenses. If so, use the method described by MaryK1101 in her post above to claim the moving expense.

@adam61