TAX WITHHOLDING AND REPORTING - MOVING EXPENSES - 8572.1

Federal and state laws require that all payments for moving expenses be reported for income tax purposes.

Agencies/departments will report moving expense payments to the State Controller’s Office. Refer to the Payroll Procedures Manual (PPM) section N147, et seq. Where applicable, payments will be included on the employee’s W-2 form.

Federal and state laws require the withholding of income, Social Security, and Medicare taxes from certain moving expense payments. The employee must be notified in writing, prior to moving, that certain moving expenses payments are subject to withholding.

Resources on Moving Expenses

• For reimbursement, refer to the California Code of Regulations, Title 2, sections 599.714 to 599.724.1.
• For tax advice on moving expenses, refer to the Internal Revenue Service (IRS) Publication 521 – Moving Expenses, or any local IRS office.
• For federal income, Social Security, and Medicare tax questions, refer to the IRS.
• For state income tax questions, refer to the Franchise Tax Board.