CapRelo has been closely following the changes to the U.S. tax laws and advising clients on the best ways to adjust policies. The IRS is currently reviewing the changes to determine how to implement them, and we will update this information when the IRS finalizes and confirms their implementation plans.
The new U.S. tax bill passed through Congress and has been signed into law by the President. Below are some of the key impacts on mobility:
- All van line expenses (HHG) and final move expenses will now be taxable.
- This means there is no more 50 mile test, 39 week test or 1 year rule.
- Supplemental rate will change, but the IRS has yet to clarify the change, and other tax brackets will change as well.
- Gross up calculations and withholding from payments may be impacted.
- Elimination of itemized deduction and personal exemptions phase-outs.
- Employees receiving lump sum payments as well as other paid relocation benefits may be impacted.
- State/local income and property tax deductions will be capped at $10,000.
- State/local amounts in excess of $10,000 will be considered taxable and subject to gross up.
We welcome the opportunity to consult with you about the tax changes and how you can adjust your global mobility program and benefits. Give us a call at 703-260-3323 or visit www.caprelo.com
*Although this written communication may address tax issues, it is not a covered opinion as described in Circular 230. Therefore, to ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments), unless expressly stated otherwise, was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.