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

Author: Alice Gilman

Under the 2017 federal tax reform law, the income exclusion for qualified moving expenses is suspended and moving expense reimbursements are taxable to employees from January 1, 2018, through December 31, 2025, except for members of the US Armed Forces on active duty and their family members.

However, in Notice 2018-75, the IRS concluded that an employer's reimbursement in 2018 of an employee's qualified moving expenses incurred in 2017 remains tax-free.

If an employer reimburses an employee's qualified moving expenses on a tax-free basis, it must gross-up the reimbursement.