GSA has issued rules carrying out a relocation policy change made in the wake of the late-2017 tax law revisions, although further changes may be ordered by the DoD authorization measure, still pending in a House-Senate conference but which congressional leaders hope to enact before year’s end.
The tax law changes generally made relocation reimbursements taxable as income, increasing the tax liability of those receiving such reimbursements. However, last year the GSA issued a policy generally allowing agencies to reimburse federal employees who were relocated for official purposes for that tax burden, and more recently the GSA issued interim rules to carry out that policy.
Under both the policy statement and the rules, though, the extra reimbursement is not available under certain circumstances, including for employees returning home from overseas assignments in order to retire or otherwise separate from service, “last move home” relocations for SES members poised to retire, and assignments under the Government Employees Training Act.
The Senate version of the DoD measure (S-1790) would extend that extra reimbursement to cover all types of federal employee official relocations; it would apply government-wide even though it is in a DoD-specific bill. The CBO has estimated that the change would be worth about $2,000 to affected employees on average.