Page 304 - Small Business IRS Training Guides

Audit Considerations

Employers should be including any moving expense reimbursements as wage income in the Form W-2 for non-active

military personnel, subject to the limited exception described in Notice 2018-75 above.

Any non-excludable taxable fringe benefits (including moving reimbursements) are included in box 1 of Form W-2
as wages, tips, and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages
(subject to wage limitations).

The following information can be used to identify whether the taxpayer provides any fringe benefits under IRC 132:

• Employer and employee interviews – Discussions with the employer and the employees may give indications

of whether fringe benefits, including moving expense reimbursements, are issues that need to be raised.

• Employee Handbooks – Many taxpayers maintain a written employee handbook outlining the benefits
available to their employees. Fringe benefits such as moving reimbursements are often described in these

handbooks.

• Employment Contracts – Benefits that are provided on a discriminatory basis may be described in
employment contracts with key personnel.

Summary

You are now able to identify changes made under Tax Cuts and Jobs Act (TCJA) regarding qualified moving expense

reimbursements.

73233-102 11048-5 Tax Cuts and Jobs Act