A provision in the Senate-passed version of the annual defense spending bill to address a lingering tax issue regarding relocation expenses for some federal employees would be worth about $2,000 to affected employees, the CBO has estimated.
The provision, in S-1790, relates an issue created by a 2017 tax law which generally made relocation reimbursements taxable as income, increasing the tax liability of those receiving such reimbursements.
Last year the GSA issued a policy generally allowing agencies to reimburse employees for the tax burden. However, that extra reimbursement is not available under certain circumstances, including for newly hired employees, employees returning home from overseas assignments in order to retire or otherwise separate from service, and “last move home” relocations for SES members poised to retire.
The further reimbursements authorized in the bill would apply government-wide even though the provision is in a DoD-specific bill.
A House-Senate conference to produce a final version of the bill will be held after Congress reconvenes in September.