Relocation Expense Agreement
Overview of this form
The Relocation Expense Agreement is a legal document that establishes the terms under which a company agrees to reimburse an employee for specific relocation expenses. This form is distinct from other employment agreements as it specifically focuses on the financial aspects related to moving for a job, ensuring clarity on repayment obligations should the employment terminate before a specified period.
When this form is needed
This form should be used when a company offers a position to a candidate who needs to relocate for the job. It is essential for establishing the financial responsibilities associated with the move, particularly when the employee might be required to repay the relocation expenses if they leave the job before a designated timeframe.
Intended users of this form
This form is intended for:
- Employers that provide relocation assistance to new hires.
- Employees who are relocating for a job and wish to understand their rights and responsibilities regarding reimbursement.
- Human resources professionals needing to formalize an offer that includes relocation benefits.
Instructions for completing this form
- Fill in the names of the company and the employee where indicated.
- Specify the total amount of relocation expenses to be reimbursed.
- Review and understand the repayment conditions outlined in the agreement.
- Both parties should sign and date the document in the designated areas.
- Ensure any additional notes or stipulations are added as necessary prior to execution.
Notarization guidance
Notarization is generally not required for this form. However, certain states or situations might demand it. You can complete notarization online through US Legal Forms, powered by Notarize, using a verified video call available anytime.
Mistakes to watch out for
- Failing to specify the relocation expense amount clearly.
- Not including all necessary signatures.
- Ignoring the conditions for repayment when employment ends.
- Leaving out dates or other critical information.
Benefits of using this form online
- Easy access: Download and complete the form anytime, from anywhere.
- Customizable: Tailor the agreement to meet specific needs by filling in relevant details.
- Reliable: Forms are drafted by licensed attorneys to ensure compliance with legal standards.
Form popularity
FAQ
Yes, report relocation assistance money on your tax return (it is taxable). You may receive a 1099-MISC form for this payment. Either way, enter the income received as Other Income on line 21 of your 1040. In TurbTax under Income and expenses, select Miscellaneous Income, then Other Reportable Income.
Debit "Relocation Benefits" or "Moving Expenses" for the same amount. For example, if you issue a $25,000 relocation benefit, credit the accrual account $25,000 and debit the expense account $25,000.
The IRS allows taxpayers to deduct eligible moving costs.If you moved to a new location because of work, you may qualify to use IRS Form 3903 to claim the cost of your moving expenses as a deduction on your federal income tax return.
When you transfer an employee from one of your places of business to another, the amount you pay or reimburse the employee for certain moving expenses is usually not a taxable benefit. This includes any amounts you incurred to move the employee, the employee's family, and their household effects.
When you give a relocating employee any sort of relocation benefitwhether it's in the form of a signing bonus, reimbursement for moving expenses, or even when you book a flight or pay for a service on behalf of your employeethat money and/or those services are considered taxable income.
A core or typical job relocation package usually covers the costs of moving and storing furnishings and other household goods, along with help selling an existing home and costs incurred house hunting, temporary housing if necessary and all travel costs by the employee and family to the new location.
Relocation reimbursement. Flexible start date. Free visits. Temporary housing. Familial support. Real estate cost assistance. Pay adjustments or bonuses. Payback clause.
If you have moving expenses that are greater than the amount of reimbursement shown in box 12 of Form 1040, or your reimbursement was reported as wages in box 1, then you can file Form 3903 with your tax return to report moving expenses and reimbursements to the IRS.
Look on your Form W-2, box 12. If there is an amount with a code P, that amount is included in your taxable income. You should take a moving expense deduction to avoid paying tax on your reimbursements. You should also take a moving deduction if your employer included your reimbursement with wages in box 1 of Form W-2.
