Relocation Income Tax Allowance (RITA)
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W-2s for Civilian Relocation payments will be available on myPay after Jan 31. Printed copies will also be mailed at this time.
We begin processing Relocation Income Tax Allowance (RITA) claims after the 2012 marginal tax rates are published. Then, your claim will be processed in the order it was received. Watch for an announcement stating we have received tax rates and can begin processing.
When an employee relocates to another permanent duty station in conjunction with a PCS, the reimbursement amounts received on settlement claims from the payment office must be reported as income to the Internal Revenue Service (IRS) and may be taxed. Mandatory Federal Withholding Tax (FWT) and applicable Federal Insurance Contributions Act (FICA) and Medicare taxes will be withheld from taxable entitlement on applicable vouchers. A PCS W-2 reflecting entitlement (income) and taxes withheld will be issued to the traveler for each calendar year that entitlement is issued to him/her or in his/her behalf (i.e., airline tickets). The traveler may also have to pay state and local taxes applicable to the old and new permanent duty stations.
To offset this burden, the traveler should apply for a RITA. This allowance is designed to reimburse the traveler for the substantial additional federal, state, and local income taxes paid because of the PCS move.
RITA is not automatic, travelers must apply for it.
Note: Travelers who had Permanent Change of Station (PCS) entitlements, other than a Relocation Income Tax Allowance (RITA), issued in the previous calendar year may be required to file a RITA claim.
- Any PCS traveler to whom PCS entitlement, other than RITA, was issued in a previous calendar year (Note: The previous year is known as Year 1), should apply for RITA.
- Any traveler who received Withholding Tax Allowance (WTA) entitlement, must submit a RITA claim the following calendar year, since WTA entitlement is treated similar to an "advance" against the RITA entitlement. The computation of the RITA claim includes reduction by the amount of the prior year WTA entitlement, which may prove that the WTA payment issued the previous year was excessive, thus requiring collection from the traveler.
Similarly, for travelers who receive WTA entitlement but do not file a RITA claim, the WTA is considered a debt of the traveler and collection action will be initiated.
RITA claims are to be received in the appropriate payment office within 120 days of the beginning of the calendar year following the year of other PCS entitlement. The RITA year is called Year 2. If the traveler wishes to have the RITA settled and a payment issued prior to filing their tax return, the RITA claim should be filed as soon as all W-2s from all sources have been received for the prior calendar year.
Note: A traveler may have more than one Year 1 and Year 2 if their reimbursement for moving expenses is spread over more than one year. Travelers may be entitled to more than one RIT allowance per travel order if, for example, the traveler sells their residence at the old duty station within two years of reporting to the new duty station and, after the sale, purchases a new residence and subsequently files and is reimbursed taxable closing costs.
To file for RITA, complete and submit the following documents:
- Travel Voucher, DD Form 1351-2, signed and dated by traveler and supervisor .
- Relocation Income Tax Allowance (RITA) Status Certification Form .
- Copy of all W-2's for the year in which the traveler is paid PCS travel claim payments for which they are claiming RITA (spouse's if filing jointly).
- Copy of the IRS Schedule SE from self-employment income, if applicable (and spouse's if filing jointly) .
- One copy of PCS travel orders, DD Form 1614, include original and all amendments .
- One copy of 1099R, only if for Military Retirement Income. (Do not include interest income).
Note: Submit a separate claim for each PCS travel order (when multiple moves are involved) and for each year 1.
PCS RITA claims for taxable entitlements processed by DFAS Rome should be faxed to DFAS-JTBAD/RO at one of the following fax numbers:
Commercial: 216-367-3422/3423/3424 DSN: 580-7833/7834/7835
If DFAS Rome was not the paying office for PCS entitlements, please mail the RITA claim to the office that processed your PCS claims and issued a W-2 for the claims.