Relocation Expense Policy

Date Established: October 19, 2020
Date Last Updated: October 19, 2020

Purpose
The purpose of this policy is to establish guidelines for the reimbursement of relocation expenses for specified new employees. Eligible employees include department heads, professional positions, and positions that are difficult to fill in the current employment market. Unless otherwise approved by the City Manager, these reimbursements shall only be for relocation into the corporate limits of the City of Ames.

Policy Statement

1. Relocation expenses may be provided up to a maximum amount of 10% of initial annual salary. Human Resources may offer relocation benefits when it is appropriate. The employing department and the following policy guidelines (subject to Internal Revenue Service regulations) will determine the total amount reimbursed.

Authorization to pay and the maximum amount of relocation expenses must be included as part of the offer of employment that has been accepted by the new employee. All eligible expenses must be incurred within one year of the first day of employment unless an extension is authorized by the City Manager. Claims for expenses must be submitted in a timely fashion after they are incurred.

2. Taxing Reimbursement
Reimbursement of expenses will be made in accordance with current IRS regulations. Reimbursement of expenses is subject to withholding of applicable income and employment taxes. Reimbursements are reported on the annual Form W-2 in Box 14 – Other.

3. Guidelines for Reimbursement
The Human Resources Department will provide the Finance Department copies of offer letters that include authorization for relocation expense reimbursement. The City Manager’s Office will provide written confirmation of any modifications to a particular relocation offer on a case by case basis.

Requests for reimbursement must be stamped for payment and signed by a supervisor with authority to approve payment of those expenses. The Human Resources Department will consult with the hiring department and the relocating employee to confirm which expenses are reimbursable under this policy. The Finance Department will maintain records of reimbursed expenses and the balance of unpaid reimbursement funds remaining for a relocating employee. All requests for reimbursement must be accompanied by documentation of expenses incurred.

Payment for shipping of household goods, as provided in these guidelines, may be processed as individual reimbursements or direct payment to the carrier via a purchase order.

4. Reimbursable Expenses
Qualified reimbursable expenses are listed below. Any exceptions require approval by the City Manager.

• Expenses to purchase a home in Ames (e.g., loan closing costs, down payment, etc.)
• Expenses for temporary housing
• House hunting expenses (employee, household members, and/or persons considered dependents for tax purposes) may include: 1) actual gas cost for personal or rental vehicles; 2) lodging; 3) airfare (coach only); 4) rental car; 5) tolls, taxi, limousine, or parking; and 6) temporary housing
• Travel and lodging costs for trips to move household goods (employee, household members, and/or persons considered dependents for tax purposes) from the old residence to the new residence, which may include: 1) actual gas cost based upon receipts or the current IRS rate for personal or rental vehicles as indicated on the Relocation Request Form; 2) lodging in transit, 3) airfare (coach only); 4) rental car; 5) tolls, local transportation or parking; and 6) pet shipping charges
• Commercial moving company
• Rental truck
• In-transit storage for up to 30 consecutive days
• Charges for packing, crating, mailing and/or shipping household goods; and other miscellaneous packing supplies
• Optional insurance on items such as furniture, clothing, and utensils
• Shipment of car(s) if not used in the move
• Cost of meals (excluding alcohol) at any point in the relocation process. Reimbursement will be for actual costs. Itemized receipts for meals are required.
• Losses incurred in breaking a lease at the previous residence (e.g., loss of security deposit)
• Non-refundable security deposits or fees for rental housing (e.g., pet fees) and/or utilities. Refundable deposits are not reimbursable.

5. Non-Reimbursable Expenses
Expenses not paid by the City include:

• Alcoholic beverages
• Movies or other entertainment while in route
• Extraordinary items requiring special handling (e.g., collector or non-operating automobiles)
• Bank fees for cashier’s checks, use of credit/debit cards

6. Repayment Requirements

Voluntary Termination within Two Years  If an employee who receives relocation reimbursement under this policy voluntarily resigns or retires from City employment within two years of the start of employment, the employee shall be required to repay the relocation assistance. The amount to be repaid shall be pro-rated based on the number of months of City employment.

Moving Outside Ames within Two Years If an employee who receives relocation reimbursement to move into Ames under this policy subsequently establishes permanent residence outside Ames prior to the completion of two years of City employment, the employee shall be required to repay the relocation assistance. The amount to be repaid shall be pro-rated based on the number of months of City employment.

This policy is not intended to provide comprehensive documentation of IRS reimbursement or deductibility of moving expenses, but provides basic information that applies to most situations. Please consult a tax professional if any questions exist concerning the reporting of moving reimbursement when filing income tax returns.

Contact Information
Human Resources Department
hr@cityofames.org
515-239-5199

Finance – Treasurer
515-239-5113