Your Year-End Relocation Tax Checklist

9.24.2020 | Every year Orion publishes this checklist to help ensure you’re prepared for tax season, but 2020 has been a year like no other. Before you tick through the list, please consider COVID-related expenses that may be deductible. For guidance, refer to our blog, “Covid-19: What Qualifies as Tax-Free Disaster Relief?”

First, Determine Your Deadline

Determine the date by which payroll needs final relocation numbers for 2020, then work backward. Below is a typical schedule for those running a year-end delta/adjustment report. For those who don’t, some steps are unnecessary and the timing may be slightly different.

6 Weeks Prior to the Payroll Cutoff

• Alert employees and vendors to your final expense cutoff date.

• Double-check/balance YTD numbers between payroll and relocation departments.

• Audit your system. Be sure gross-up policies are set up correctly.

• Audit transferee information – i.e. 1040 exemption numbers, marital status, gross-up policy, homeowner/renter status (if applicable), etc.

3-4 Weeks Prior to Payroll Cutoff

• If you haven’t already, review expenses to see if any were incurred due to COVID-19 as some may be non-taxable.

• Final expense cutoff date.

• Double-check that no expenses have been missed or entered with the incorrect year as the expense date.

• Check for any outstanding payroll issues.

• Run final payroll withholding report for the year.

1-2 Weeks Prior to Payroll Cutoff

• Verify that no new expenses have been processed or entered into the system.

• Run a final audit of the system including verifying that all employee information is complete.

• Send earnings information request to payroll. Be specific about whether YTD earnings include previously reported relocation.

Final Week Prior to Payroll Cutoff

• Get earnings information from payroll and enter into the system. Verify that you have information for all transferees with reportable expenses.

• Double check the calculations. Look for anything strange.

• Send the delta report to the payroll department.

January

• Re-run any problem gross-ups.

• Double check that you have email/mailing addresses for transferees who will be receiving Relocation Tax Reports.

• Mail the reports to transferees including any memos and/or tax publications.