Current PCS Travel
Note: The Relocation Income Tax Allowance (RITA) filing deadline has been extended to July 15, 2020. See the RITA page for more information on filing and who is eligible for a RITA.
The Tax Cuts and Jobs Act (TCJA) of 2017 made most civilian permanent change of station entitlements taxable. To learn more about the background behind the TCJA, click here.
It is important that you understand what the taxable implications are for your move. Review the list of taxable entitlements below.
Taxable entitlements are reported as income to the IRS and you will receive a Travel W-2 in January, following the year that reimbursements were paid/taxes withheld. Once you have submitted your tax return for the moving year and you are eligible, you can file a Relocation Income Tax Allowance (RITA) request to DFAS.
Taxes are withheld at the following rates:
- A mandatory 22 percent federal income tax withholding,
- 6.2 percent Social Security tax, and
- 1.45 percent Medicare tax.
State and local taxes are not withheld, so you should consult with your local tax advisor to determine if your PCS wages are taxable under your current state and local government laws and regulations.
Third Party Payments
Additional debts may be owed for taxable moving expenses paid direct to Third Party vendors. Third Party vendors handle:
*Shipment of Household Goods (HHG) *CONUS non-temp storage
*Temporary Storage of HHG *Mobile Home Shipments.
You will receive an Advice of Payment (AOP) notifying you that the vendor payment(s) made on your behalf was processed. The AOP will reference the Invoice Number(s) and Bill of Lading associated with the vendor payment(s). The AOP is for your information and is not an official debt notification.
If the invoice was paid between January and October in the tax year, DFAS will issue a Travel W-2 in the year following the move reflecting the taxes paid.
If the invoice was paid in November or December of the tax year, it will be reflected in the following year's W-2.
If eligible, you may file a Relocation Income Tax Allowance (RITA) claim for tax reimbursement after you have filed your tax return with the IRS and state and local taxing authorities (if applicable).
If you have a debt remaining after your RITA payment, the payDFAS app offers an easy way to pay that. Learn more about the app here.
The following is a list of all taxable PCS entitlements:
- En route travel, lodging, meals and transportation including individually billed account/personally procured airfare, government-issued airline tickets-commercially billed account, privately owned vehicle mileage, tolls, taxis, etc.
- All House Hunting Trip (HHT) expenses, including Government Procured Airfare and per diem
- All Temporary Quarters Subsistence Expenses, or TQSE including lodging and meals
- All real estate expenses
- Non-temporary household goods storage (CONUS)/Temporary HHG Storage
- Miscellaneous Expense Allowance
- Relocation services (i.e., Home Marketing Incentive Payments, Property Management, etc.)
- Withholding Tax Allowance
- Relocation Income Tax Allowance
- Household Goods Shipment (HHG)
- Privately Owned Vehicle (POV) Shipment (CONUS)
Withholding Tax Allowance
The WTA is treated as an advance against the Relocation Income Tax Allowance (RITA) and is deducted from any RITA computed in the following year. If you elect WTA, it will be reimbursed on each claim that has taxable allowances. Remember, WTA itself is taxable, it does not cover state taxes, local taxes, Medicare taxes, or Social Security taxes.
For more on WTA and whether it is the right choice for you, click here.
Relocation Income Tax Allowance
Once you receive your Travel W-2 and have filed income taxes for the year in which you received your taxable reimbursements, you can submit a Relocation Income Tax Allowance (RITA) claim.
The RITA is designed to reimburse most of the federal and state income tax paid as a result of a PCS transfer. The RITA is taxable.
For instructions on how to file a RITA claim, click here to go to the RITA page.
Still have questions? Check out the Frequently Asked Questions section for more information.
Questions about 2018 or before PCS travel, click here.
Please note, the information on these pages is intended for DFAS Travel Pay customers. If you are not sure if this includes you, click here for a listing of DFAS Travel Pay customers.
Page updated August 4, 2020