The purpose of this policy is to define and establish University of Wisconsin-Madison requirements for the procurement and payment of household relocation costs and costs associated with temporary and indefinite work assignments.
It is the policy of the University of Wisconsin Madison to allow institutions to reimburse relocation, related travel and temporary lodging expenses for new and presently employed personnel assigned to new locations by transfer or promotion, in accordance with IRS regulations. This policy identifies allowable expenses related to relocation and temporary or indefinite work assignment away from the employee’s headquarters’ location.
This policy applies to all faculty and staff when relocation and related travel costs are funded in full or part by the University or when temporary or indefinite work assignments are made.
Relocation expenses for employees may be provided dependent upon availability of funding. The approving authority and the following policy provisions will determine the total amount provided for relocation.
Reimbursement of expenses or payment of an Employee Relocation Award is mandatory when the appointing authority requires the employee to change residence location because the employee is ordered to relocate or is promoted to a different position within University of Wisconsin-Madison, and the appointing authority determines the relocation or promotion requires the employee to change residence. It should be determined whether it is in the best interest of the University to provide payment or reimbursement for relocation and travel expenses. The following circumstances should be considered:
OR, the University may reimburse or pay the direct costs associated with the relocation, including the costs associated with self-moves, such as truck/trailer and containers, or a commercial moving carrier’s van line service. If self-move is selected, neither the employee nor the employee’s spouse or dependents may be reimbursed for their labor. Allowable costs associated with the relocation may be reimbursed to the employee or, at the discretion of the institution, paid directly to the commercial carrier upon pre-audit of all invoices and receipts. When payment is made directly to the carrier, sales tax, which may be assessed on containers, must be deducted. The employee must substantiate all costs with an itemized bill of lading and paid receipts for direct costs.
A non-inclusive list of indirect costs that will not be paid include expenses related to house-hunting; the moving of goods not considered household goods such as farm equipment, livestock, motorcycles, automobiles, recreational vehicles, and pets; the moving of swing sets, jungle gyms, and other similar outdoor items and third party services for disassembly or assembly of these items; and storage for more than 30 days or any storage that is at the convenience of the employee. Please see the Relocation Expenses Chart.
The University may reimburse the transportation costs of the employee and immediate family. For moves within the continental United States, the amount of reimbursement for transporting the employee and immediate family members from the former residence to the new place of residence may not exceed the cost of one-way mileage for one automobile at the standard mileage reimbursement rate. The maximum allowable mileage reimbursement shall be based on one-way mileage using the most direct route. MapQuest and Google Maps are the standard tools for calculating mileage.
For moves to or from the continental United States, the cost of one-way airfare for the employee and immediate family members may be paid or reimbursed in lieu of mileage. Airfare must be purchased in accordance with Policy 3016 – Air Travel.
The designated headquarters city of an employee must be established and changed at the time the employee begins employment at the new location.
The Internal Revenue Service looks at all facts to determine whether the travel assignment was intended to be temporary or indefinite. ( Rul. 93-86; Rev. Rul. 99-7). The table below provides a brief summary of temporary and indefinite travel assignments. Examples provided within the IRS regulations can be found in the document titled When “Temporary” Travel Assignments Become “Indefinite.”
|Duration (Note the assignment changes from temporary to indefinite at the point which university knows the assignment will exceed one year.)||Expected to last one year or less||Expected to last longer than one year|
|Tax Home||Permanent work site||New work assignment location|
|Meals and lodging||Excludable from income||Taxable|
|Transportation - Expense Mileage and Parking||Excludable from income||Taxable|
|Transportation - Commuting Mileage||Taxable||Taxable|
|Expenses related to an event not located at permanent work site or new work assignment, such as conference travel||Subject to University Travel Policy||Subject to University Travel Policy|
Departments/Divisions should contact their Human Resources Offices to ensure appropriate approvals, accounting and tax related issues are addressed and in place prior to the starting date of the temporary assignment.
Departments/Divisions should account for each temporary assignment as a separate contract and use appropriate processing procedures (e.g., requisitions, billing).
University of Wisconsin-Madison employees on assignment to another agency or institution may be eligible to receive supplemental compensation in lieu of reimbursement to employees for meals, lodging, and transportation expenses, which may be paid directly to the employee with required deductions made or transferred for payment to University of Wisconsin-Madison.
Supplemental compensation for periods exceeding a one-year period will become taxable to the recipient at the time the University knows the agreement will exceed one year.
In the event that assignments change from temporary to indefinite, or indefinite to temporary, triggering a change in tax-ability to the employee, the institution’s Office of Human Resources must work with the UW System Service Center to ensure proper coding and tax treatment.
Failure to comply with UW-Madison Travel Policy or Procedures may result in disciplinary steps, up to and including dismissal.
Approving Authority: Prior to the move, the Approving Authority must authorize in writing the payment of an Employee Relocation Award, reimbursement for or direct payment of relocation costs, or temporary lodging expenses. Written approval is required prior to authorizing reimbursements to the employee.
When approving relocation expenses, the Approving Authority must review and approve the following information on a Relocation Authorization Letter using University letterhead:
When approval for relocation expenses is granted, the Approving Authority must provide the relocating employee a copy of the Authorization Letter. The Authorization Letter must be attached to any relocation related request for payment or reimbursement.
Employee/Recipient: Employees are responsible for completing the following tasks, as applicable, to be eligible for relocation payment or reimbursement: