FIN-013: Reimbursement of Moving and Relocation ExpensesDate: 03/02/2005 Status: Final
- Moving Agreement
- Reimbursement Rules and Guidelines
- Interview Expenses
- Expenses Incurred and Supported
- House Hunting
- Temporary Quarters
- Home Sale
- Purchase of Home
- Cancellation of Lease
- Travel (Actual or “Final Move” to New Job Location)
- Transportation and Storage of Household Goods and Personal Effects
- Non-reimbursable Expenses
- Employee Responsibilities
The University is committed to sound fiscal stewardship of federal, state, and local funds. This policy sets forth required approvals, limitations and other guidelines that must be followed so that an employee may be reimbursed for expenses associated with moving and relocation of the household for the convenience of the University.
This policy does not cover reimbursements of expenses associated with employee business travel on behalf of the University. See policy FIN-004, Travel, Meals, and Entertainment Expenses Incurred on Behalf of the University.
The University may elect to reimburse an employee’s moving and relocation expenses within the stated maximum limitations and restrictions. All such expenditures must be reasonable, necessary and as economical as possible. The employee must complete a Moving Agreement and, upon completion of the move and relocation of the employee, submit claims for reimbursement following guidelines described below.
Authorized Approver:A University official who:
- Has authorization over the account being charged;
- Can only approve reimbursements within their transaction authorization limits;
- Should be the spender’s direct supervisor;
- Is not the individual seeking reimbursement, unless documented by the dean or vice president; and
- Should not approve expenses for an individual to whom they report.
A licensed commercial moving company.
Includes spouse or dependent who resides in the household and moves to the new location.
Actions to change a place of primary or permanent residence.
An agreement to repay moving expenses if the employee remains in the employment of the University from the first day in the new position until twelve (12) months thereafter, or as specified in the Moving Agreement. The agreement must be signed prior to an employee receiving any reimbursement.
Expenditures for transporting the employee, family, household goods and personal effects from the former residence to the new residence.
A house, condominium, townhouse or rental property (e.g., apartment, flat) where the employee's primary household is permanently maintained.
Houshold goods and personal effects which are maintained at the employee's main place of residence.
Professional Research Staff:
Professional staff principally engaged in research and appointed to limited terms of employment at the University. Positions include postdoctoral research associates, research scientists, senior scientists, and principal scientists.
The process of assigning, establishing and/or settling in a particular place for employment purposes.
Expenditures other than moving expenses incurred in the process of relocating the employee and family.
Lodging or housing in which the employee lives at a reasonable cost until permanent residence is secured, or up to ninety (90) days. Temporary quarters can consist of any type of lodging including hotels, motels, apartments, or single family dwellings.
University Staff Employees (University Staff):
Those salaried, non-faculty employees hired on or after July 1, 2006, and those salaried non-faculty employees and administrative and professional faculty electing to participate in the University Human Resources System established by the Board of Visitors under the authority granted by the Restructuring Act and the Management Agreement. (The term “University Staff Employee” includes all three categories of University Staff Employees - Operational & Administrative, Managerial & Professional, and Executive & Senior Administrative.)
The agreement between the University and the Commonwealth required by Subsection D of §23.1-1004 of the Restructuring Act.
The Restructured Higher Education Financial and Administrative Operations Act, Chapter 10 of Title 23.1 of the Code of Virginia.
To be eligible for reimbursement, the employee’s move and/or relocation must meet the following five conditions:
- One Year Employment. The employee must satisfactorily maintain employment on a full-time basis, as defined by the University, for at least one year, or as specified in the Moving Agreement, commencing on the date that the employee starts work on a regular basis at the new location.
- Permanent, Full-time Position. The employee must be assigned to a full-time, salaried position and must have agreed to work on a full-time basis for at least one year. Faculty employees must be joining the faculty at the rank of instructor or above, or must be filling an administrative or research position. University staff employees and professional research staff employed in full-time, salaried positions are eligible to receive reimbursement.
- At the Employer’s Request. The relocation must be for the good of the University as determined by the authorized approver. Expenses will not be reimbursed when the relocation is at the request or the convenience of the employee.
Distance. The distance between the employee’s new work location and the former residence must be at least fifty (50) miles greater than the distance between the employee’s old work location and the former residence. That is, the employee’s commuting distance must have increased by at least fifty (50) miles one way. For example, if the original commuting distance from the former residence to the old work site was ten (10) miles, the new work site must be at least sixty (60) miles from the former residence (10 miles original commuting distance plus 50-mile increase).
Note: In situations where the commuting distance is not increased by fifty (50) miles, the total cost of moving and relocation is considered taxable income. (This includes moves from temporary housing to permanent housing.)
- Established in Payroll System. Employees must have “employee” status activated in the payroll system prior to any reimbursement of moving expenses. Employees having “applicant” status in the system may not receive reimbursements.
Note: If the employee’s spouse is a state employee and otherwise eligible for moving and relocation expenses, reimbursements of any such expenses will be paid to only one employee and to move the primary household to the new location.
To be compensated for moving and relocation expenses, an employee must execute a Moving Agreement with the University prior to receiving any reimbursements. Departments may commit any amount for an employee’s moving expense up to the maximum amount allowed by State and University policy. Local funds may be used to reimburse an employee beyond state limits with the approval of the appropriate dean or vice president. The agreement will stipulate that:
- The employee must remain employed on a regular, full-time basis in the University’s service for at least one year, commencing on the date that the employee starts work at the University. For Faculty appointed on an academic basis, one year is defined as one regular academic session (Fall and Spring semesters, nine months). For all others, one year is defined as twelve months. The employee’s failure to remain employed by the university for at least one year for reasons beyond his/her control, other than poor performance, will trigger the employee’s responsibility to repay the full amount (including taxes) paid and/or reimbursed by the University. The University may, at its discretion, waive all or part of the liability owed by the employee. Any such waiver must be approved in writing by the employee’s department head or dean and the Human Resources representative. Prior to such approval, the department head or dean must notify Human Resources if the employee does not remain employed at the University for the requisite year. The Payroll Department shall take appropriate action to recover the funds.
- The Vice President and Chief Human Resources Officer or designee, must also sign the Moving Agreement. No University obligation exists, nor may any reimbursements be processed, until all parties execute the agreement.
- Payments to a commercial, third-party moving company will be paid up to the contract amount. Reimbursements to an individual will be limited to $15,000.00 in accordance with State policy when using state funds and the amount agreed upon in the Moving Agreement if using local funds.
Reimbursement Rules and Guidelines:
Moving and relocation is on a reimbursement basis only. Reimbursements are limited to actual costs incurred up to the amounts agreed to by the department and the employee within the limits outlined in this policy. Reimbursements through other processes, such as petty cash or department credit cards, or direct payments from departments to hotels, airlines, restaurants, car rental companies, or other vendors on behalf of employees are not allowed. To be eligible for reimbursement, expenditures must be reasonable, necessary, and the employee must have executed a Moving Agreement (See Section 2 above).
All commitments for moving and relocation must be made from existing funds available to the departments. If departments choose to provide for moving expenses, they must do so within their own budgets. No central funds are available for this purpose.
Under federal and state law, reimbursements to an employee may be taxable and non-taxable. Reimbursements will be processed through the payroll system, and will be made in accordance with federal and state law. Moving expenses excluded from taxable income (“qualified expenses”) are defined as the reasonable cost of:
- Moving household goods and personal effects from the former residence to the new residence (including the common carrier); and
- Traveling (including lodging but not meals during the period of travel) from the former residence to the new place of residence. The costs of rental cars are not considered “qualified expenses” and are not reimbursable except as part of house-hunting expenses.
All other expenses listed in this policy are reimbursable but will have appropriate taxes withheld.
Any expenditure incurred by or for a perspective employee prior to offer and acceptance of employment shall be deemed interview expenses and shall not be deemed reimbursable moving and relocation expenses. Interview expenses may be reimbursed to prospective employees in accordance with University Travel Policies in effect at the time such expenses are incurred. Interview expenses are not considered moving and relocation expenses and should be submitted on separate Travel Expense Reimbursement Vouchers.
Expenses Incurred and Supported:
Expenditures to be reimbursed must be reasonable and necessary. Expenses may be reimbursed only after the employee executes a Moving Agreement and must be reported within twelve (12) months of the date the employee starts work at the University (except for circumstances noted in Section 14).
The total dollar limit for gross reimbursements made directly to the employee for all expenses (other than for transportation and storage of household goods by a commercial, third-party moving company which must be handled through Procurement Services) may not exceed $15,000.00. Gross reimbursements (i.e. actual reimbursements received by the employee or paid to third parties on behalf of the employee) include any taxes withheld on these reimbursements. Direct payments made by the University to a licensed moving agent are not included in the $15,000.00 maximum. The cost of the common carrier charges is deducted from the maximum amount specified in the Moving Agreement. The total amount expended through procurement plus the amount reimbursed to the employee shall not exceed the maximum amount specified in the Moving Agreement. There is no limit placed on payments made by the University to common carriers for transportation and storage of household goods other than the limit established by the authorized approver in the Moving Agreement. Payments made by employees directly to third-party movers are not limited by the $15,000 cap.
Reimbursement is limited to the following expense categories:
- House hunting
- Temporary quarters
- Home sale
- Purchase of home
- Cancellation of lease
- Travel (actual or “final” move to new job location)
- Transportation and storage of household goods and personal effects
House-hunting expenses apply to both employee and spouse but not children or family members. They may be incurred while traveling to and from the new job location and while looking for new living accommodations. House-hunting trips may occur both prior to and after the employee’s first day of work. The employee may be reimbursed for these expenses only if the travel begins after a Moving Agreement is executed and the travel is primarily for the purpose of finding a place to live.
Reimbursable house-hunting expenses include the following for employee and spouse:
- Cost of transportation ( including car rental);
The cost of transportation includes parking fees and tolls, plus actual expenses such as gas and oil (but not depreciation) for the use of a personal car. In lieu of actual costs, reimbursement may be made at the mileage rate in effect. The number of trips for house-hunting that are reimbursable is limited to three (3) for the employee and three (3) for the spouse. The maximum number of nights or reimbursable lodging is fifteen (15). A night of combined lodging for both the employee and spouse counts as one night.
All reimbursements associated with house-hunting are deemed taxable expenses and taxes will be withheld as appropriate.
Limits on lodging and meals rates imposed by State Travel Regulations (see the Procurement Website and select “Travel and Meals”) are applicable to hotel and meals expenses incurred during house-hunting trips
Reimbursement for reasonable lodging or rent may be claimed for a period of ninety (90) days not to commence earlier than thirty (30) days prior to the first day of work. Reasonable residential parking fees will be reimbursed during the ninety (90) days of temporary quarters. Expenses for meals may be claimed for the first thirty (30) days of residence in temporary quarters. Such expenses must be reasonable and necessary. Reimbursements for temporary quarters are taxable and appropriate taxes will be withheld.
Supporting documentation for this reimbursement shall include the HUD Settlement Statement signed by buyer and seller at closing.
The following expenses relating to the sale of the primary residence are reimbursable:
- Actual expense of real estate commission;
- Attorney fees;
- Escrow fees;
- State or local transfer taxes;
- Pest inspections.
The following expenses relating to the sale of the primary residence are not reimbursable:
- Sales commissions and similar expenses if the employee acts as a selling agent (closing and legal costs are allowed);
- Advertising and “fix-up” costs;
- Loss sustained on sale of residence;
- Real estate and capital gains taxes;
- Payment and repayment of interest;
- Points or loan payment charges that are negotiable;
- “Carrying” costs (maintenance fees, utilities, principal, etc.);
- Mortgage penalties;
- Buyer’s closing costs, including Virginia fees.
Purchase of Home:
Expenses related to the purchase of a replacement home which is the employee’s primary residence are reimbursable for the specific items listed below and are subject to the $15,000.00 limitation. In order to qualify for this reimbursement, the relocated employee must have owned a primary residence at the prior location, which due to relocation, has been sold. This reimbursement is not allowed for the purchase of a second residence, investment property, business property or resort/vacation property at the new work site. Supporting documentation for this reimbursement includes the HUD Settlement Statement signed by buyer and seller at closing. Reimbursements of expenses associated with the purchase of a home are taxable and appropriate taxes will be withheld.
The following expenses relating to a home purchase are reimbursable:
- VA funding fee;
- Loan origination fee, or lease processing fee;
- Mortgage survey;
- Appraisal fee;
- Credit report;
- Title search;
- Recording fee;
- Title insurance;
- Attorneys fee;
- Home inspection;
- Notary fees.
All of the above expenditures must be related to the purchase of the primary residence. Documentation clearly identifying these expenses is required. In order for the expenses related to a home purchase to be considered for reimbursement, the replacement of the primary residence must be accomplished (closed) within twelve (12) months after the official starting date of employment. Extenuating circumstances that result in the twelve (12) month period expiring prior to purchase (closing) of a replacement home may be approved by the authorized approver for up to an additional twelve (12) months. Extensions after this period may be present to the appropriate Dean/VP for review and, where warranted, approval. All such extension should be in writing and provided to the Payroll Department (email@example.com).
Costs related to the purchase of a primary residence not specifically listed above are not reimbursable.
Examples of expenses relating to home purchase that are not reimbursable are as follows:
- Utility deposits and/or connection fees;
- Real estate taxes, prepaid or otherwise;
- Capital gains taxes;
- Mortgage loan differential;
- Realtor fees relating to purchase;
- Remodeling or decoration expenses;
- Points, discount fees or loan payment charges;
- Repair and maintenance costs;
- Homeowner insurance;
- Homeowner warranty fees;
- Private mortgage insurance;
- Permit fees (e.g. building, sewer or zoning);
- Deposit for rent.
Cancellation of Lease:
The settlement of a lease in a former residence is reimbursable if the settlement is due to moving and relocation. Reimbursement for lease cancellation is taxable to the employee and taxes will be withheld.
Travel (Actual or “Final Move” to New Job Location):
Travel relating to moving and relocation is eligible for reimbursement under three circumstances: (1) the initial trip after employment to the new location; (2) house hunting trips (See Section 6 of this policy); and (3) the trip to bring the family to the new residence. When the employee and family are traveling to the new home, expenses for in-transit meals and lodging are reimbursable. Transportation expenses also include parking, tolls, plus actual expenses such as gas and oil (but not depreciation) for the use of the personal car. In lieu of actual costs, payment may be made at the mileage rate in effect.
Limits on lodging rates imposed by State Travel Regulations (see the Procurement Website) are applicable to hotel expenses during travel. (Note: Per diem rates may not be used for moving and relocation.)
Automobile rental is not a reimbursable expense, except for house-hunting purposes.
Common Carrier Moves: The actual costs paid for common carrier transportation of the employee's household goods and personal effects from the former principal residence to the residence at the new work location are reimbursable.
If the employee seeks reimbursement for costs associated with common carrier transportation, the amount of actual costs is allowed in addition to the $15,000 limitation. Unless utilizing a contracted vendor, the employee should obtain three (3) quotes when the price exceeds the institution's noncompetitive purchase threshold. The lowest of the three (3) quotes, meeting the pick-up and delivery requirements of the employee, should be used for the moving of personal effects from the former residence. Copies of the quotes should be provided to the University prior to a formal commitment to utilize the common carrier.
When at all possible, the employee should utilize a common carrier based in Virginia. When outside of the Commonwealth of Virginia, employees should contact Virginia common carriers to inquire if they are able to match bids submitted by out-of-state firms.
Self-Moves: If the employee chooses to move himself/herself, the amount of the actual cost allowed will be included in the $15,000.00 limitation. The following actual costs are reimbursable, within the $15,000.00 total limitation, with appropriate documentation:
- Moving vehicle rental. Costs of renting a moving van, truck, trailer, hand truck or other appropriate moving vehicles, equipment, and supplies are reimbursable. (Note: Vehicle rental for moving purposes is not reimbursable unless used for house-hunting.) Purchase of such a vehicle or equipment is not reimbursable. The purchase of moving supplies, such as packing paper, boxes, or cartons may be reimbursed with appropriate receipts. The amount of any such purchases must not exceed $500.00. Gas used by the rental truck during the move is reimbursable with proper receipts.
- Labor used during move. Reimbursement is limited to a reasonable hourly wage with the maximum total of $500.00. Labor provided by the employee or the employee’s immediate family member(s) is not reimbursable. A receipt from the individual employed, with signature and amount paid must be attached to the reimbursement request.
- Mileage. If a personally-owned or borrowed moving vehicle is used in the move, reimbursement is allowed at the mileage rate specified in the current Appropriation Act. Reimbursement will not be allowed to cover the “rental value” of the personally-owned vehicle. A car or truck with a trailer in tow will also be reimbursed at the mileage rate specified in the current Appropriation Act.
- Tolls. Tolls paid during the move are reimbursable provided the name of the facility (road, bridge, tunnel, etc.) is documented.
Storage: The expense of temporarily (in-transit) storing household goods and personal effects for a maximum of thirty (30) days is reimbursable if the employee is unable to move directly into the new residence. This amount is not includable in the $15,000 limitation.
Costs not specifically allowed in this policy are not reimbursable, nor are actual miscellaneous and incidental expenses such as but not limited to baby-sitting, disconnecting and connecting appliances and utilities, care or transportation of pets, removing and installing antennas, carpet and draperies, general cleaning, laundry or dry cleaning while in temporary quarters, and the cost to transport recreation vehicles such as yachts.
All expenses submitted for reimbursement must be actual, reasonable, necessary and within University guidelines. Each employee eligible for moving and relocation reimbursement is responsible for:
- Making all specific moving arrangements (i.e., times for pick-up and delivery, etc.) and for resolving any damage claims directly with the moving agent;
- Assisting the department in completing the Moving and Relocation Expense Workbook for submission to Payroll;
- Obtaining and submitting original receipts necessary to support all claims for reimbursement;
- Submitting claims to the Payroll Department within thirty (30) days after the employee moves into the permanent residence, but in no case later than twelve (12) months after beginning employment at the University;
- The authorized approver may grant extensions of up to an additional twelve (12) months if there is a finding of extenuating circumstances resulting in the expiration of the original twelve-month period; and
- Remaining an employee of the University for a period of at least one year.
Payroll: The Payroll Department will review all requests for reimbursements, except direct payments to licensed, third-party commercial moving agents. The Payroll Department has ultimate authority to determine taxability of reimbursements, and the responsibility to ensure that taxable (“non-qualified”) and non-taxable (“qualified”) payments are reported correctly on the W-2.
Procurement Services: Procurement Services will process contracts with and payments to third-party commercial moving companies for the transportation of household goods and personal effects.
Hiring departments/schools: Departments (authorized approvers) shall have the responsibility to establish monetary limits, to initiate the Moving Agreement signing process, and to complete and submit the Moving and Relocation Expense Workbook along with original receipts and supporting documents.
Payment for Moving and Storage of a Relocating Employee's Household Goods:
Moving and storage of a relocating employee’s household goods and personal effects cannot be paid on a Payment Voucher. Instead:
- Price quotations must be obtained as specified in the Guidelines for Competition, preferably from Virginia-based firms.
- A Moving Agreement must be executed and processed as described in Preparation of Employment Agreement for Moving Expenses.
- The employee’s department must submit a Purchase Requisition for the move in the Integrated System, including the required price quotations and a copy of the executed agreement as documentation.
- If the cost of the move is less than $5,000, the employee may choose the moving agent in consultation with a Procurement Services buyer. If the cost of the move is $5,000 or more, the moving agent selected must be either a contracted vendor or the lowest of the three quotes from non-contract vendors.