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