The IRS has clarified reporting moving expense reimbursements on Form W-2. The only amounts to be reported under ‘Code P’ for 2019 are excludible moving expense reimbursements paid directly to a member of the U.S. Armed Forces who moves per a military order and incident to a permanent change of station. Employers should not report any other amounts under Code P for 2019, on Form W-2.
Effective for tax years 2018 through 2025, the exclusion for qualified moving expense reimbursements applies only to members of the U.S. Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station. All other employees have only nonqualified moving expenses and expense reimbursements subject to tax and withholding. Report qualified moving expenses for members of the Armed Forces as follows:
- Qualified moving expenses that an employer paid to a third party on behalf of the employee (for example, to a moving company) and services that an employer furnished in kind to an employee are not reported on Form W-2.
- Qualified moving expense reimbursements paid directly to an employee by an employer are reported only in box 12 of Form W-2 with code P.
Nonqualified moving expenses and expense reimbursements are reported in boxes 1, 3, and 5 (use box 14 if railroad retirement taxes apply) of Form W-2.
These amounts are subject to federal income tax withholding and social security and Medicare taxes (or railroad retirement taxes, if applicable).
‘Code P—Excludable moving expense reimbursements paid directly to a member of the U.S. Armed Forces. The exclusion for qualified moving expense reimbursements applies only to members of the U.S. Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station. Show the total moving expense reimbursements that you paid directly to your employee for qualified (allowable) moving expenses.’
For additional information see 2019 General Instructions for Forms W-2 and W-3.
