I have a client that is moving his employees from MI to AZ. He is reimbursing them for their costs. Including paying 2000.00 a month extra in which the employee can use either to pay on housing in AZ until home is sold in MI.
What I need to know is: It is my understanding that relocation is a benefit to the employee thus is considered in their wages and taxes are taken. Is this correct?
Secondly, if an employee wants the employer to pay him a set amount for moving expenses (thus is a bonus of sorts) with no mention of the amount being for moving expenses, can the employee at year end claim his moving expenses (based on tax guidelines of course)?
I would really appreciate the help. I have been looking everywhere for these answers. Not finding anything specific in AICPA, Accountants World, Tax sites etc.
Rebecca