The Tax Cuts and Jobs Act of 2017 made most civilian permanent change of station entitlements taxable. This means you will be taxed on items related to your U.S. (CONUS) and out of the U.S. (OCONUS) PCS move.

To see a list of taxable entitlements, click here.

Your taxable income will be increased by the amount of the civilian relocation reimbursements.

No. If eligible for a Relocation Income Tax Allowance, you may submit a RITA claim as soon as you file your income taxes to the IRS. The RITA is designed to reimburse most of the federal, state, and local income tax paid as a result of a PCS transfer. The RITA is taxable.

The normal processing time for a RITA claim with an order report date of later than January 2015 is eight business days. Please allow up to an additional five business days after processing for payment to post to your bank account.

The Government makes payment for some moving services directly to third Party vendors.  Payments made to third-party vendors for Shipment of Household Goods (HHG), CONUS non-temporary storage of HHG, Temporary Storage of HHG and Mobile Home Shipments are considered taxable income to the civilian traveler.

Taxes are owed on the additional income based on the moving expense entitlements paid by DFAS direct to Third Party vendors.

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. 

Third-party payments are considered taxable income to the traveler in the tax year the vendor was paid.  DFAS uses a non-calendar tax year for taxable third-party payments, as permitted by IRS Publication 15-B.

Vendor invoices paid between January and October will be reported as income in the calendar year the invoice was paid. For example, if payment is made in April 2019, a 2019 Travel W-2 will be issued in January 2020.

If the invoice was paid to the third party vendor in November or December, the income is reported in the following tax year. For example, if payment is made in November 2019, a 2020 Travel W-2 will be issued in January 2021.

The IRS is drafting written guidance for affected DoD employees who receive corrected 2018 W-2s reporting income from travel payments made to third party vendors.  The guidance will include procedures for seeking relief from tax penalties.  DFAS will publish the guidance and link it to the TCJA main page when available.

Yes. With only a few exceptions, civilian relocation expenses paid by your employer, either directly to you or to a vendor on your behalf, are taxable income. Taxes will be withheld as required on reimbursements made directly to you. You will also be liable for withholding owed in connection with moving expenses paid to vendors on your behalf. For CONUS moves, the only non-taxable PCS expense is the cost of a residential sale conducted through the agency relocation services company home sale program, in which residences of transferees are purchased under a RSC supplier contract and then sold in an independent transaction. For OCONUS moves, privately operated vehicle shipment and extended household goods storage are non-taxable.  

No. Each PCS move is unique and may be affected by any number of factors depending on the details of the move. We recommend consulting with your employing agency human resources to find out more about the estimated cost of your move

Expenses for extended HHG storage for employees assigned to OCONUS locations are tax exempt. Additionally, allowances for privately owned vehicle shipment to, from, and between a CONUS post of duty and an OCONUS post of duty, as well as POV shipment between OCONUS posts of duty, are not taxable. However, expenses for transportation of an employee’s POV within CONUS are taxable.

No.  Per the IRS, HHG shipments are taxable even for OCONUS assignments.

The Relocation Services Company home sale program remains non-taxable. Under this program, residences of transferees are purchased under a RSC supplier contract and then sold in a separate independent transaction. The cost of those residential sales will continue to be governed by IRS Revenue Rule 2005-74 and are not taxable income to employees. Additionally, expenses for extended HHG storage for employees assigned to OCONUS locations are tax exempt. Allowances for POV shipment to, from, and between a CONUS post of duty and an OCONUS post of duty, as well as POV shipment between OCONUS posts of duty, are also exempt from taxation. 

The following civilian relocation allowances are taxable, click each to learn more about each entitlement and how to file for reimbursement:

• -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)
• -Mobile Home Transportation

We cannot answer questions on individual tax situations. We recommend you contact a tax advisor for additional guidance.

Yes. The RITA payment is taxable income. However, RITA is calculated and designed to minimize the impact on your taxes.