For decades, companies have used corporate relocation as a way to entice employees to move to a new area for employment. Recent changes to the tax code could have a big impact on whether businesses are still able to claim tax breaks based on this process.
This legislation change is related to the U.S. Tax Cuts and Jobs Act and while it won’t necessarily eliminate some of the savings that businesses take advantage of related to corporate relocation, it will affect costs and the specific ways in which businesses are able to pay for these services.
What Do These Changes Mean for Employers and Employees?
While the implications of these tax changes aren’t completely clear, many businesses are expecting their corporate relocation expenses to go up as a result of this new legislation. This new legislation effectively eliminates the federal deduction for moving expenses through 2025. This means that individuals are no longer able to take a personal deduction on their income taxes related to moving expenses. In addition, reimbursements for moving expenses are no longer excluded from income calculations.
Employees looking to offset the effects of these changes will likely increase their corporate relocation reimbursement expenses to help employees offset these tax changes. The problem will likely most impact small companies who simply may not be able to offset these additional expenses for new employees, which in turn could cause these employers to have a hard time competing with larger companies who are more able to absorb the additional expenses.
Check With Your Accountant for Additional Information Related to Tax Changes
While we’re well versed in the intricacies of corporate relocation from a practical standpoint, we’re not accountants. For this reason, it’s best that you consult with your tax professional about the exact implications this new tax law may have on you, your business and any employees that are relocating to the area.
Reach out to All Points Moving & Storage With Corporate Relocation Questions
If you’re still unclear about how corporate relocation services could work for your business, feel free to reach out to our team today for more information. We can help you navigate the complex process to help you determine your best options when it comes to relocating employees from across the state, the country, or even the world. Give us a call today at 866-421-9490 to speak with one of our experienced moving specialists.