Every year since 1968 Atlas Vanlines conducts a comprehensive survey of corporate relocation decision makers. This year, 444 respondents completed online questionnaires between January 15 and February 22. Each respondent has responsibility for relocation and is employed by a company that has either relocated employees during the past two years or plans to relocate employees this year.
This year’s survey yields a treasure trove of information certain to uncover the trends and offer clear understanding to the evolving challenges in corporate relocation. In general, 2018 was another positive year for the relocation industry; roughly nine out of ten organizations indicate both volumes and budgets either held steady or increased.
Tax Reform Policy Changes
Most firms, across sizes, implemented policy changes last year in response to the tax
law and its elimination of the deduction for moving expenses. A majority plan to do so
again in 2019. While the most common change was to gross-up taxable relocation
benefits, firms put many other methods in play to manage costs and protect
employees against negative financial impacts.
Below are some keys findings from the survey along with a link to the complete survey results.
- For the past eight years, the key external factor affecting relocation volumes has been the lack of qualified local talent.
- Family issues/ties has taken the top spot among reasons for declined relocations, while spouse/partner employment has held second place.
- Over the last five years, the majority of firms have used candidate assessments to support relocations.
- For the fifth year in a row roughly six in ten firms indicate spousal/partner employment “almost always” or “frequently” affects relocations.
52nd Annual Atlas Corporate Relocation Survey
About Relocation America International
Relocation America International is a full service relocation management company dedicated to providing innovative relocation services, value added support, and superior customer service to clients relocating families domestically and internationally. Visit http://www.rainternational.com for more information about our services or contact us at firstname.lastname@example.org
“What is carrier valuation?” Carrier valuation is a declaration by the transferring employee (person being moved) of the maximum amount of the carrier’s liability in the event of a transit-related loss or damage of their household goods.
Valuation is not insurance. In other words, valuation provides a certain level of protection for loss or damage caused by a carrier while the shipment is in the care, custody, and control of the carrier. The amount of coverage is predetermined prior to the move and may not be sufficient in the event of a loss.
WHAT DOES IT COVER?
When you move, your personal property is loaded onto a moving truck. While most moves go smoothly, accidents do happen and some items may be lost or damaged during shipment. Prior to the move a carrier representative will discuss with the transferring employee the amount of liability the carrier is responsible for in the event of loss or damage. At the time of the move a descriptive inventory list will be developed by the carrier and the transferring client. This list includes the count and condition of the shipped items when they come into the care, custody, and control of the carrier. At times the client may have certain items that carry a higher value than normal such as artwork, jewelry, collectibles etc….
It is our recommendation that items of high value such as jewelry, coins, and collectables be moved personally by the transferring employee. If they are is unable or unwilling to do this, then these items must be recorded and reported on a special form called the high value inventory form. The determination of the value of the transferring employee’s entire shipment is a very important part of the moving process and is pre-determined by the transferring employee prior to the move.
What is tax gross up? A tax gross up means the company has increased an employee’s pay, bonus, or any other taxable income so the employee doesn’t actually pay his/her own (estimated) tax. If they are told they are getting a million dollar bonus, the tax gross up means they actually get a check for $1 million after taxes. As most relocation costs are considered income to the transferee and subject to tax, tax gross up has the potential to greatly increase a corporation’s relocation cost.
Tax gross up is a legal business practice. If it is not done correctly, it can result in an audit and can bring adverse affects on your transferring employee and your corporation. An incorrectly filed tax gross up could mean employees might have to file a tax extension. In some cases, they might need to file an amended tax return owing to wrong W-2 statements. It’s advisable to hire services from a third party relocation management company that offers gross up tax assistance.
Gross-up/tax assistance on taxable relocation expenses is not required by the IRS; gross-up is a benefit that a company chooses to give to transferees who qualify. Most relocation policies offer some sort of tax assistance to transferees so their out-of-pocket tax costs due to the relocation are eliminated or reduced. One thing to keep in mind is that the gross-up payment itself also is taxable to the employee and subject to withholding and payroll tax. Therefore, to fully tax protect the employee, the gross-up must itself be “grossed up,” and the gross-up of the gross-up must be grossed up, and so on.
There are a few different methods used to calculate the gross up (inverse method, true up and simple method) and depending on how a company calculates the gross up, an employee may still end up owing money at tax time. Below is a comprehensive explanation of how each method applies to income. Managements generally maintain that the tax gross-up is a valuable tool for hiring and retaining talented executives. It is generally accepted within the relocation industry that transferees should not have to absorb the stress of relocation and suffer financially as well.