Moving expense gross up claim back

[nolanm]

Hi all, some advice please

TP has $3,7k gross up moving expenses paid by employer to a 3rd party. Also $7k paid to TP.

Total $10.7k is in his W2 and has had taxes withheld from both.

I assume we can claim the $3.7k back as TP did not receive it. Reading IRS525 looks like either on schedule A, or claim the tax as a credit.

TP does not itemize. Is it appropriate to calculate federal taxes withheld on a % basis, and to enter this in Schedule 3, and if so where do I enter. I can enter into 12H, "other payments or credits", or in line 6z "other nonrefundable credits". Look like 12H is more accurate but I cannot enter the description of the credit - it just pulls through as tax.

Thanks for the help

Nolan

[dkh]

Didn't the TCJA eliminate moving expenses except for military ?   Is your client in the military?

[nolanm]

correct on the TCJA

But we are not claiming moving expenses. The employer paid a 3rd party, then included the amount in the TP's W2 as income. And he paid tax on it. 

[IRonMaN · Accepted solution]

He received a benefit, why wouldn't he pay tax on it?

[Just-Lisa-Now-]

His employer gave him free money, he pays tax on it. 

Once upon a time we could deduct moving expenses to offset this additional income, some states still do allow moving expenses.

[nolanm]

That's a good question.

The gross up form that his employer sent that this assistance is "considered taxable income". So I guess if he was military or could claim moving in some other way, we could claim it,

Still not clear to me why they split the moving assistance into money he received vs money paid to a 3rd party (gross up) other than to help the TP reconcile his books.

I will treat forms for info purposes only

Thanks all

[qbteachmt]

"Still not clear to me why they split the moving assistance into money he received vs money paid to a 3rd party (gross up)"

Hiring incentive, or relocation agreements. They are happening a lot, nowadays. The amount paid to him was likely to help offset that he had an additional taxable amount, plus a little something to make it worth his while. You see these bonuses being offered right now.