In my paystub I have an amount of ~$5000 as relocation bonus and relocation offset of $3000. What are those amounts and how should I use them in my tax return?

[michele-rasa]

I was relocated in 2016 and received a grossed up relocation expenses. For tax return, I received a summary from the relocation company as follows

Additional reportable expenses: paid to employee: 0, paid to other: $3000, Tax category: taxable. And it shows in my end year paystub as relocation offset.

My question is: is it additional income I have to add or is it a tax offset?

Thank you for your help

[DianeW]

It indicates you were reimbursed for moving expenses where some of the amount was allowable as a tax-free reimbursement (those expenses that would be allowed as a deduction on your tax return and would meet the qualifications to be tax-free).

The excess reimbursement is required to be included in your taxable income (should already be in box 1 of your wages) because it would not be an allowable deduction on your tax return whether or not you were reimbursed.

That being said, this appears to be what is being shown on your W2 and/or pay stub.  There may be a code "P" in box 12 of your W2 that indicate the tax-free portion.  There is no deduction on the tax return unless there were allowable expenses above and beyond your reimbursement for those allowable expenses.  If you think you have 

Click the link here for the qualifications:  Guide to IRS Form 3903:  Moving Expense

1. Go to Federal Taxes
2. Click on Deductions and Credits
3. Click on I'll choose what I work on (if shown)
4. Scroll down to Other Deductions and Credits
5. On Moving Expenses, click on the start or update button