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Relocation Survey Highlights Company Reactions to Suspension of Moving Expense Deduction/Exclusion

Prior to its 2018 Global Workforce Relocation Conference held in Seattle on October 2018, the Worldwide Employee Relocation Council conducted an on-line survey in which it asked members how their companies were reacting to the elimination of the moving expense deduction/exclusion (MED) by the Tax Cuts and Jobs Act (TCJA). The TCJA suspended both the deduction and the exclusion for the years 2018 through 2025. As a result, expenses for household goods movement, and final move travel, are not deductible for 2018, and company reimbursements/payments of those expenses are taxable to the transferee.

The respondents were asked how, if at all, the loss of the MED was impacting move volume. Almost 78% of those who responded to that question reported that move volume remained about the same, with an additional 4% reporting increases. About 15% reported that volume decreased somewhat, with 3% reporting significant decreases.

Another question asked was whether the loss of the moving expense deduction will lead to increased use of lump sum programs.  When Worldwide ERC® asked that question directly, 59% reported that it had not, with 18% reporting that it had.  An additional 23% reported that it had not yet, but that their policies were under review.  However, when asked if they were changing specific policies, almost 54% suggested their companies were using more lump sum programs.  While this may appear inconsistent with the responses noted above, it is likely that it reflects respondents’ impressions of the industry as a whole; rather than the experience of their own company.
Data presented earlier in the year suggested that most companies were grossing up. However, the survey data suggests a more equivocal picture. The question asked whether companies are changing their gross-up policies. About 47% said they were not, but 36% reported that they were. An additional 17% said they had not changed, but the policy was under review.
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