CRP Financial and Tax Aspects of Relocation

Question 1

Under current U.S. tax law, which moving-related expenses paid by an employer are taxable to the employee?

Accepted Answer

Most employer-paid moving expenses, as the exclusion was suspended for civilian employees by the Tax Cuts and Jobs Act of 2017

Answer

None — all moving expenses are tax-free

Answer

Only expenses exceeding $5,000

Answer

Only house-hunting trip costs

Question 2

What is 'gross-up' in relocation compensation?

Accepted Answer

Additional payment from the employer to cover the taxes owed by the employee on taxable relocation benefits

Answer

Inflating the moving estimate to cover unexpected costs

Answer

A pay increase associated with a promotion-linked transfer

Answer

A fee charged by the RMC for complex moves

Question 3

Which IRS form reports taxable relocation benefits paid to an employee?

Accepted Answer

Form W-2

Answer

Form 1099-MISC

Answer

Form 1098

Answer

Form 2441

Question 4

What is a 'lump sum' relocation benefit?

Accepted Answer

A one-time payment to the employee to manage their own relocation expenses

Answer

A fixed reimbursement schedule with itemized approvals

Answer

A per-diem allowance for temporary housing

Answer

A shared cost program between employee and employer

Question 5

Which method calculates gross-up based on the employee's marginal tax rate applied to the net benefit?

Accepted Answer

Supplemental method

Answer

Flat gross-up method

Answer

Inverse method

Answer

Blended rate method

Question 6

A 'relocation repayment agreement' (clawback) requires an employee to repay relocation costs if they:

Accepted Answer

Voluntarily leave the company within a specified period after relocation

Answer

Refuse a promotion after relocating

Answer

Miss deadlines during the move

Answer

Request additional benefits beyond policy