Systems and Procedures
A Division of The Office of Budget and Finance
A Division of The Office of Budget and Finance
Internal Revenue Service (IRS) regulations require all moving or relocation expenses (paid to the employee or directly to a third-party vendor on behalf of the employee), paid or reimbursed by The Pennsylvania State University (University), are subject to payroll tax withholding and form W-2 reporting. Payments remitted directly to third-party vendors appear on the pay stub as taxable gross compensation. Taxation may result in a significant reduction in net payment to the employee during the impacted pay period(s). Employees are encouraged to consult with a professional tax advisor to determine the individual taxation impacts on net payment of relocation payments. Refer to Policy HR104 Payment for Relocation Expenses for maximum reimbursable/payment limits. Any exceptions to these limits need the approval of the Associate Vice President for Budget and Finance.
The University, at the discretion of the business area/hiring unit, may pay for moving and relocation expenses of a newly hired or current faculty, staff, administrator, or academic administrator accepting a position at the University (new employee) or relocation within the University from one University geographic location (campus) to another (campus) for a current employee.
To be eligible for moving or relocation expenses under Policy HR104 Payment for Relocation Expenses, the move must increase the employee's commute by at least 50 miles (i.e., commute distance from employee's prior home to new position location exceed commute distance from employee's prior home to prior position by more than 50 miles).
The moving or relocation allowance does not apply to temporary assignments (typically less than one year).
Uniform Guidance 2 CFR 200.464 Relocation of Employees details costs which are not allowable as charges on federally sponsored awards or grants. See Procedure CR2009 Expenditure Guidelines for Costs Not Allowable Under Uniform Guidance for complete details.
Business Areas determine moving, or relocation allocations and the maximum allowable amount offered based on budgetary or other factors. Business Areas have the discretion of offering three (3) types of allocations:
Only one type of allocation is to be used and once an allocation method has been selected, no changes are permitted.
At the discretion of the business area, a one-time lump sum payment may be provided to assist with moving and relocation expenses.
Under the 2 CFR 200.464 Relocation of Employees, lump sum payments are not permitted on Federal awards and all one-time lump sum payments must be recorded using General Ledger (GL) Account number 51259011 Other Compensation - Moving Relocation Expenses - Lump Sum Taxable - Unallowable F&A. See Procedure CR2009 Expenditure Guidelines for Costs Not Allowable Under Uniform Guidance for complete details pertaining to the use of permitted GL accounts.
The Request Payment (Non-Supp, Non-Regular Work) (Single) form is available within the Manager Tools in WorkDay and is completed by a Manager or Manager's WorkDay Neocase Proxy to request a one-time non-recurring lump-sum payment for moving or relocation expenses to an employee. WorkDay has established approval paths based on Policy FN18 University Approval Authorization. The Request Payment form follows those established approval paths until finalized by the Financial Officer. Once the Financial Officer approves the form, the one-time, non-recurring moving or relocation payment, less the appropriate payroll taxes, is recorded on the employee's pay slip and direct deposited into the employees' bank account.
Receipts are not required to be submitted with the Request Payment form to Central Accounting; however, if the Business Area requires the submission of receipts, the Business Area is responsible for maintaining those receipts (see the Financial Records Retention Schedule for retention times).
At the discretion of the business area, reimbursement of moving or relocation expenses, paid by the employee, incurred in the transportation of household goods and personal effects, plus possible reimbursement of other related relocation expenses may be provided.
An Employee - Travel expense report is created in SAP Concur with Moving/Relocation selected from within the Business Purpose drop-down list. All paid receipts are to be uploaded to the expense report. Once approved, the reimbursement is direct deposited into the employees' bank account.
The Moving Expenses Support Form is an optional form available for tracking expenses associated with the relocation process. If utilized, the completed form is uploaded as supporting documentation to the expense report in SAP Concur.
At the discretion of the business area, a one-time lump sum payment (a percentage of the original allocation) to assist with moving and relocation expenses with the balance of the original allocation available for reimbursement for the transportation of household good and personal effects, plus possible reimbursement of other related relocation expenses may be provided.
An alternative to "out-of-pocket" expenditures requiring reimbursement is to have the Office of Central Procurement coordinate the move. In such cases, Procurement will coordinate all arrangements for moving an employee's household goods and possessions using a University-contracted moving company. The business area must contact the appropriate Procurement Agent to initiate the relocation process. Further details on the Moving/Relocation Services process can be found on the Procurement website.
Payments made directly to third party vendors will appear on the employee's pay slip as income and be taxed as income earned. This may result in a reduction in net payment to the employee during the impacted pay period(s). In accordance with Policy HR104 Payments for Relocation Expenses, the University will spread the tax burden from third-party vendor payments by dividing the relocation cost over three (3) pay periods.
The payment is recorded using GL 52210950 Moving/Relocation Reimbursement - 3rd Party Vendor - Taxable - Allowable F&A or 52210951 Moving/Relocation Reimbursement - 3rd Party Vendor - Taxable - Unallowable F&A. See Procedure CR2009 Expenditure Guidelines for Costs Not Allowable Under Uniform Guidance for complete details pertaining to the use of allowable and unallowable GL accounts.
Use of the Purchasing Card, for processing moving or relocation expenses, is strictly prohibited and any such transactions will be declined.
Expense reports submitted for the purpose of moving or relocation expenses using an expense type other than Moving/Relocation expenses will be rejected.
Violation of a financial policy and/or procedure should be reported to your supervisor, unit manager, Human Resources representative, and/or office responsible for the policy and/or procedure. Where those resources are inadequate, you may choose to make an anonymous report through the Penn State University hot-line by calling 1-800-560-1637.
The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for collaborating with Internal Auditing when audits are being performed in the administrative area. Audits pertaining to sponsored activities or other audits performed by external auditors may also be performed. The Financial Officer is responsible for collaborating with the external auditor and/or a central University office related to these procedures.
University Records must be retained and managed in accordance with Policy AD35 University Archives and Records Management and the University's Records Retention Schedules that have been approved by the Records Management Advisory Committee (RMAC), the Office of General Counsel, and Senior Vice President and Chief of Staff. These Records Retention Schedules are derived from - or based upon - federal, state, and local statutes or regulations (i.e., Federal Acquisition Regulations, the OMB Uniform Guidance, Internal Revenue Service, and other regulations governing the auditability and retention of financial records), University Policy, industry standards, and business needs. All University Records must be maintained in such a manner to provide ease of access, establish a suitable audit trail for all transactions, and to be reviewed prior to disposition.
University Records and Transitory/Disposable Records are defined below. See Policy AD35, Definition of Terms for additional information.
Upon completion of the retention period, University Records must be disposed of via secure destruction or transfer to University Archives, unless an exception to the disposition process set forth below applies. In many cases, retention periods and disposition methods may be generally determined by comparing the type of record (i.e., reports, correspondence, etc.) to similar records series with known retention periods listed on the Records Retention Schedule. If the disposition method for University Records states "Review by Archives" on the Records Retention Schedule, the Unit responsible for those records should consult the University Archivist for a final determination of disposition. For University Records that must be securely destroyed, units may arrange for shredding services by contacting the Inactive Records Center (IRC).
Exceptions to the disposition process are as follows:
To safeguard the privacy of individuals, records that contain Personally Identifiable Information (PII), as defined in University Policy, AD53 Privacy Policy, or student records, as defined in University Policy AD11 Confidentiality of Student Records, must be securely destroyed beyond recovery. For additional information regarding privacy and the protection of an individual's personal information, see Policy AD53 Privacy Policy.
Additional question may be direct to the Office of Records Management.
There are no exhibits associated with this document.
For questions, additional details, or to request changes to this procedure, please contact the Director, Tax Services.
To request changes to this procedure, please contact the Office of Systems & Procedures by submitting a GURU Technical Support Request Form.
July 25, 2024