Moving Expenses on W2 - 2020

[kashbunker]

Hello, 

My moving expenses showing up in Box 1 as income. Is that where they should go? I thought it was going to be box 12?

If it stays in Box 1, that severely impacts my ability to get the right EIP2 because it overstated my wages.

Looking for guidance. Thanks

[LenaH]

Yes, Box 1 is correct. Moving expenses only go into Box 12 if they are excludable moving expense reimbursements paid directly to a member of the U.S. Armed Forces. 

For 2018 through 2025, employers must include moving expense reimbursements in employees’ wages

Exception 1: Members of the U.S. Armed Forces can still exclude qualified moving expense reimbursements from their income if:

• They are on active duty
• They move pursuant to a military order and incident to a permanent change of station
• The move expenses would qualify as a deduction if the employee didn’t get a reimbursement

Employer Update

[kashbunker]

Thank you Lena. That validates where the Moving Expenses need to be for W2.

How do I handle the EIP2 or any other Economic Impact payment issue, as my Box 1 will be overinflated?

[LenaH · Accepted solution]

The second economic stimulus payment (sent in late December 2020 or early January 2021) was most likely based on your 2019 return. If you did not qualify at that time due to your adjusted gross income on your 2019 tax return, then you could have gotten the Recovery Rebate Credit on your 2020 return. However, if your AGI is still too high, then unfortunately, you do not qualify for the credit. 

However, if you are disqualified from the third stimulus due to your income, then you can recapture that using the Recovery Rebate Credit on your 2021 tax return, assuming your adjusted gross income decreases.  

@kashbunker