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
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