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The Impact of US Tax Reforms on Gross-up Approaches in Relocation

by Elaine Baker

The 2017 US Tax Cuts and Jobs Act was signed on December 22, 2017, leaving little to no time for organizations to evaluate the impact of the relocation-specific changes on in-process and pipeline moves.  Most organizations adopted to gross-up formerly excludable and/or non-taxable relocation support, resulting in increased investment for the organization, and having no impact on the employee.  As the new year approaches - and organizations are faced with challenges around managing variances in federal and state taxability, software updates and pressures to balance mobility investment with employee and customer experience - planning will be critical.

Will companies continue to provide gross-up assistance to their employees, potentially increasing their mobility program costs in the process? Will they differentiate move types to determine eligibility for gross-up assistance?  Where gross-up support is not provided, will the cost to the employee be a barrier to relocation? Will failure to provide gross-up support limit the ability of the organization to meet growth and talent priorities?

Thankfully, the answers to these questions don’t need to follow an “all or nothing” approach. With almost a year of new regulation experiences under their belts, organizations now have an opportunity to assess the tax impact on their relocation programs and revisit the level of support provided to their employees, potentially segmenting their gross-up plans based on the value of each relocation to both the employee and organization.

On October 9, 2018, at 11am EST, SIRVA will host a free webinar with Worldwide ERC® that will address current opportunities and the implications of tax support decisions from a practical and strategic point of view. We hope you’ll join us.  To learn more, please visit Worldwide ERC and register for this helpful webinar.  Following the presentation, 2017 Tax Cuts and Jobs Act (almost) a Year Later and a Look Ahead, speakers Taryn Kramer and Kathy Burrows (Vice President of Global Consulting and Director of Global Consulting, respectively) will be on hand to answer questions.