Civilian Relocation PCS Tax Changes
The Tax Cuts and Jobs Act of 2017 made most civilian permanent change of station entitlements taxable. A Travel W-2 is issued in January following the year that reimbursements were paid/taxes withheld.
The TCJA does not affect travel allowances received prior to Jan. 1, 2018. To learn more about the background behind this change, click here.
How the TCJA will affect you depends on when your PCS orders were issued. Select from one of the three categories below to see specific information for your situation.
DFAS recommends that 2018 travelers file income tax returns by the IRS filing deadlines.
2018 Travel W-2’s will not report the following taxable entitlements if they were paid to a vendor.
- HHG shipment - Mobile home shipment
Corrected W-2s will be issued at a later date to report the taxable moving expense paid to the vendor. However, there is currently no anticipated timeframe for completion of the system change needed to account for these taxable moving expenses and issuing the corrected W-2s.
Travelers receiving a corrected W-2 will need to file an amended income tax return. There may also be an additional debt owed to DFAS for tax withholdings. Travelers can file a supplemental RITA claim to alleviate that additional tax burden.
W-2 Box 12
The dollar amount recorded in Box 12, code P on Travel Pay W-2s represents non-taxable civilian PCS reimbursements. This amount is neither taxable income nor an allowed deduction in 2018 and does not impact tax liability. The non-taxable PCS reimbursements are listed in Box 12 for informational purposes only. Corrected W-2s removing this information from Box 12 are not required. The amount listed in Box 12 code P of travel W-2 is not required to be reported to the IRS on a tax return or input into tax filing software.
Check here for the IRS link clarifying the update.
The following is a list of all taxable PCS entitlements. These pages link to additional information about each entitlement.
- 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
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.
Get Help with the Costs of Taxable Entitlements
Need to talk to someone? Please contact the Customer Care Center at 1-888-332-7366, options 1 then 1, or contact us by email at DFAS-CIVREL-Questionsonly@mail.mil for any additional questions.
For employees located overseas, you may contact the Customer Care Center via DSN 312-699-8030 or 312-699-0300 between the hours of 7:30 a.m. and 5 p.m. EST.
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 civilian PCS travel customers.
Page updated March 26, 2019