Employer Reimbursed Moving Expenses - I do not have code "P" in box 12 of my W-2. Employer reimbursed my expenses as "gross up" amounts. How do I file these?

[Paul4]

I am in a similar situation. I dont have a P in box 12. The "gross-up" amount is higher than the actual "relocation amount" reimbursed to me, so my employer paid taxes on the relocation amount.

1. Is this gross-up amount already included in box1, or do I not need to worry about it, since my employer paid it already?

2. You mentioned that I should include the amounts in turbotax, but I dont see a special box in W2 to enter the relocation amount. If it is a gross-up, does it go into my tax calculations?

[CharlesWi · Accepted solution]

Your employer reimbursed moving expenses are not deductible. Code P in box 12 of your W-2 indicates deductible moving expenses, the fact that there is no P indicates not deductible.  Additionally gross-up indicates an extra payment from employer to cover the extra tax liability this method creates. To record the amounts in your TurboTax, just transcribe the information exactly from your W-2 into the W-2 section of TurboTax.

When the company reimburses you for an expense that the IRS does not consider deductible, the company’s reimbursement becomes a tax burden to you.

Gross-Up:

This enables you to be fully reimbursed for nondeductible moving expenses or provides some tax relief, depending on the company’s tax policy, for the monies paid to your or on your behalf.

MOVING EXPENSES-DEDUCTIBLE FROM INCOME

Whether your employer reimburses you or not for any of the following expenses, they are deductible from your income net of any reimbursement.

• Household Goods and personal effects, includes cost of van, packing, crating, insurance, disconnecting & reconnecting utilities, and all appliances, satellite dishes, antennas, cable, etc.
• Storage of household goods and personal items within a period of 30 consecutive days.
• Shipping a car, motorcycle, boat, and pets.
• Rental vans plus gas, oil, tolls, and parking fees.
• Tips for the movers, includes cost of food items, donuts, coffee, pizza and sodas, etc.
• Cost of any packing supplies you purchase for personal packing.
• Moving a college student.
• Transportation from Temporary living to your permanent home.
• Rental car for final move up to four days – 3 days in old location – 1 day in new location.
• The IRS has adjusted the standard mileage allowances for use of a car in travel to 19.5 cents per mile for moving expenses.

REIMBURSEMENTS (THE W-2 BOX 1 AND BOX 12)

Deductible moving expense reimbursements paid directly to you will be reported in Box 12 of your W-2 and will be preceded by the code letter “P”. Under no circumstances should they be included in Wages that are show in Box 1 of your W-2. Your employer must withhold federal income tax, social security tax, Medicare Tax and state tax from reimbursements. Most employers increase your reimbursement to make up for the deductions for taxes – called Gross-Up.

The IRS has a great tool on their website called "Can I deduct my moving expenses?" Just click this link, answer a few questions and the tool will tell exactly what you can  deduct and for how much:  http://www.irs.gov/uac/Can-I-Deduct-My-Moving-Expenses%3F

IRS Pub 521, Moving Expenses: http://www.irs.gov/uac/Publication-521,-Moving-Expenses

[drewclimbs]

This answer is wrong! There are two ways an employer can reimburse you for moving expenses. The first is through an accountable plan, which has you track expenses, make reports and pay back any excessive reimbursements. These types of reimbursements are included in your W-2 in box 12 code P and are not included in your taxable wages. The second type of reimbursement is considered a non accountable plan. This can include both nondeductible expenses as well as deductible expenses, but because they weren't run through an accountable plan, they must be included in your wages. The deductible expenses that  are included in your wages are deductible to you and can be included in form 3903, which carries over to the front page of your 1040.

[Paul4]

I am in a similar situation. I dont have a P in box 12. The "gross-up" amount is higher than the actual "relocation amount" reimbursed to me, so my employer paid taxes on the relocation amount.

1. Is this gross-up amount already included in box1, or do I not need to worry about it, since my employer paid it already?

2. You mentioned that I should include the amounts in turbotax, but I dont see a special box in W2 to enter the relocation amount. If it is a gross-up, does it go into my tax calculations?

[thomasallenboohe]

code P is for Armed Forces only

[macuser_22]

@thomasallenboohe - it wasn't 4 years ago when this question was asked.  This is a 4 year old post that you commented on.   The answer is correct for a 2014 tax return.