A panel of tax and legal experts, sponsored by Worldwide ERC, provided insight to over a thousand corporate clients, relocation management company contacts, and relocation professionals on the most current interpretation of the tax law today.

To confirm, there were no tax changes related to the US domestic home sale programs – properly structured home sale programs that follow the 11 key elements continue to be tax excludable.  

On the elements that are changing, the main area of impact as we know, were the moving services and the final move expenditures.  The moving services expenses for US domestic shipments, and for shipments into the United States, and out of the United States, as well as permanent storage charges held in the US for international assignees, are now taxable expenses.

Note, if a household goods move was completed in 2017, and the expenses hit in 2018, there is no ruling on if those expenses can be excludable under the 2017 law.
A quick poll during the call today advised 49% of corporations are now grossing up household goods and final move expenses, 6% of corporations are grossing up for certain employee levels, 2% of clients are doing no gross up, and 37% have not made a decision.

Items eliminated under the new tax law, were the 50-mile rule, the 39-week rule, and the one year limit on relocation related expenses.  There is also an impact to mortgage subsidy amounts (lower limits) and bridge loans for relocation, which are no longer tax-free.  Corporations are examining their policies now due to the tax changes.

Your account director at Cornerstone can help you assess the potential tax impact estimate of the household goods and final move expenses based on your 2017 spend.  We will look for our clients to advise us on the preferred tax treatment of the expenses for 2018 tax year.  Don’t hesitate to let us know if you have any questions.