Relocation Policy Flashcards
7 cards from real CRP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Relocation Policy flashcards as text
Under current U.S. federal tax law, how are most employer-paid moving expense reimbursements treated for civilian employees?
Answer: Taxable wages, because the moving expense exclusion is suspended
The Tax Cuts and Jobs Act suspended the exclusion for qualified moving expense reimbursements for most employees, and the 2025 tax law made the suspension permanent, so reimbursements are generally taxable wages.
Which groups remain eligible for the moving expense exclusion or deduction under current U.S. rules?
Answer: Active-duty military members moving under orders, and certain intelligence community members
Exceptions to the suspension apply to active-duty armed forces moving due to a military order and permanent change of station, and to certain intelligence community employees.
What is the key difference between a full gross-up and a limited gross-up?
Answer: Full gross-up covers all taxable benefits; limited covers only specified benefits or amounts
A limited gross-up restricts tax assistance to certain benefits or a cap, while a full gross-up covers taxes on all taxable relocation benefits.
Why does tax gross-up usually increase total relocation cost for the employer?
Answer: The gross-up payment is itself taxable, so more must be paid to cover the combined taxes
Because the gross-up is also taxable income, the employer must pay enough to cover tax on both the benefit and the gross-up.
In international assignment policy, what does tax equalization aim to do?
Answer: Keep the employee's tax burden roughly equal to what it would have been at home
Under tax equalization the employer withholds a hypothetical home tax and pays the actual home and host taxes, leaving the employee neutral.
What is a hypothetical tax in an expatriate policy?
Answer: An estimate of home-country tax withheld from pay and used to settle actual taxes
Hypothetical tax is the home-based tax deducted from the assignee's pay, while the company pays actual taxes.
Which is the most common reason policies cap reimbursement for temporary living at 30 to 90 days?
Answer: To encourage timely permanent housing and control cost
Caps encourage employees to settle quickly and limit open-ended costs.