What requirements must be met for moving expenses to be excluded from an employee's taxable income?

Author: Alice Gilman

An employee must substantiate his or her moving expenses (e.g., by submitting receipts and other documentation of expenses) to his or her employer prior to being reimbursed. An employee who fails to substantiate moving expenses cannot be reimbursed tax-free. In addition, these rules apply to reimbursing an employee's moving expenses:

  • The move generally occurs within one year after employment begins;
  • The location of the employee's new job must be at least 50 miles farther from the employee's old home than the location of his or her old job was; and
  • The employee must work in full-time employment for at least 39 weeks during the first 12 months after arriving in the general area of the new job. However, the employee need not remain employed by the same employer.