RSC Expense Management & Tax Compliance 2

Question 1

Under IRS rules, which relocation expense reimbursement became fully taxable to employees after the Tax Cuts and Jobs Act of 2017?

Accepted Answer

All employer-paid relocation reimbursements

Answer

The TCJA suspended the moving expense exclusion for most employees (2018–2025), making virtually all employer relocation reimbursements taxable wages.

Question 2

A relocation policy uses a 'gross-up' provision. What is the primary purpose of this provision?

Accepted Answer

Offset the additional income tax burden on the relocating employee

Answer

Gross-up payments reimburse employees for the additional federal and state income taxes they owe on taxable relocation benefits.

Question 3

Which IRS form must employers use to report taxable relocation benefits paid to employees?

Accepted Answer

Form W-2

Answer

Taxable relocation benefits are reported as wages on the employee's Form W-2 in Box 1.

Question 4

An employee moves from New York to California for work. Which state's income tax rules primarily govern withholding on relocation payments made during the move?

Accepted Answer

Both states may have withholding obligations depending on timing

Answer

Multi-state withholding obligations can arise from both origin and destination states depending on when income is earned and paid.

Question 5

A 'miscellaneous expense allowance' in a relocation policy is best described as:

Accepted Answer

A fixed lump sum for incidental costs not otherwise covered

Answer

A miscellaneous expense allowance is a fixed, unrestricted payment intended to cover small incidental relocation costs without requiring receipts.

(RSC) Relocation Specialist Certification Practice Test

(RSC) Relocation Specialist Certification Practice Test

RSC Expense Management & Tax Compliance 2