Moving Expenses (Non-Qualified)
Process for Taxation of Non-wage Compensation
Disclaimer: Determination of moving expenses for taxation purposes is a function of University Accounting; not University Payroll. Questions should be directed to NC State University Controller's Office at 919-515-7203.
Description:
Moving expenses are broken down into two categories, Qualified and Non-Qualified.
Qualified expenses are typically reimbursed to an employee for moving of household goods and personal effects for the employee and their immediate family. They are not taxable, but will be reported in Box 12 of the W-2 with a code “P”.
Non-qualified moving expenses are typically expenses incurred for house hunting trips, meals, temporary living costs associated with the disposal of the old residence and acquisition of the new residence. If non-qualified expenses are reimbursed by the employer they are taxable to the recipient and are reported as income on the W-2.
For a more thorough review of moving expenses please visit NC State University Controller's Office website
Non-qualified expenses that are reimbursed will appear as the following code on the employee’s paycheck:
Employee’s Responsibility:
- The employee must provide documentary evidence to University Accounting in order to receive reimbursement; for example, receipts, substantiation of mileage, etc.
University Controller's Office Responsibility:
- Provide a spreadsheet to University Payroll by the 5th of each month, but no later than December 1st of each year, with the following information:
- Employee Name
- Employee ID number
- Amount Reimbursed to employee for non-qualified moving expenses
University Payroll’s Responsibility:
