OBBB change anything?

OBBB extended TCJA \u2014 moving still fully taxable through 2026.

Active military exception?

Yes \u2014 military still has moving expense deduction (Form 3903).

Lump sum vs reimbursement?

Same \u2014 both fully taxable.

State tax variations?

Some states (CA, NY) decoupled and still tax. Few states don't.

How to ask for gross-up?

'Will you provide a tax gross-up on the relocation benefit?'

Relocation Package Tax Cost

Post-TCJA (2017): relocation reimbursements taxable. Add 30-40% gross-up to make employee whole. Use this tool to estimate gross-up needed.

Moving Cost Reimbursement ($)

Temp Housing ($)

Home Selling Assistance ($)

Marginal Tax Bracket %

Benefit

—

Tax Owed

—

Gross-Up Needed

—

Total Cost

—

Moving cost	—
Temp housing	—
Home selling asst	—
Total benefit	—
Total tax rate	—
Tax on benefit	—
Gross-up required	—
Total company cost	—

The Tax Cuts and Jobs Act (TCJA, 2017) eliminated the moving expense deduction. All employer relocation benefits are now taxable W-2 wages. To 'make whole' the employee, employers add a 'gross-up' — extra cash to cover the tax burden on the relocation.

Post-TCJA Landscape

Before 2017: most relocation tax-free, deductible. After 2018: all relocation taxable to employee, deductible to employer. Major change in negotiation — savvy employees demand gross-up; cheap employers don't offer it (rookie mistake costing 30-40% of benefit value).

Gross-Up Math

Without gross-up: employee receives $20K, owes $7K tax → keeps $13K. With gross-up: employer pays $30K total ($20K benefit + $10K gross-up). After tax on both, employee nets $20K (made whole). Recommended: 30-40% gross-up rate.

Negotiate Smart

(1) Get itemized package broken down. (2) Ask for gross-up explicitly. (3) Negotiate 'tax assistance allowance' separately. (4) Choose net-make-whole structure rather than fixed dollar. (5) Spread over multiple tax years if possible to reduce bracket impact.

Last updated May 2026. Sources: IRS Pub 521.