Worldwide ERC®, the American Trucking Association (ATA) and the International Association of Movers (IAM) sent a joint letter to Congress today advocating for the reinstatement of the moving tax expense deduction and exclusion.
Today, 6 May, Worldwide ERC® sent a joint letter to Congress with the American Trucking Association (ATA) and the International Association of Movers (IAM) advocating for the reinstatement of the moving tax expense deduction and exclusion. The letter urges Congress to restore this tax relief tool that is vital to making work relocation affordable while supporting workforce mobility. The letter also asks that, as our country rebuilds from the economic slowdown, Congress ensure that the corporate and individual tax rates remain competitive with the rest of the world.
The moving tax expense deduction and exclusion is a tax relief tool that would make it easier to move and relocate employees, which is essential for U.S. employers as they rebuild and strive to remain globally competitive. The deduction incentivizes finding a job by removing the financial hardship of “having to move” as a barrier to work, and it supports both mobile and remote workforces. It is estimated to have provided $1 billion in tax relief each year, which is significant to those businesses and employees involved in talent mobility and relocation.
Unfortunately, the Tax Cut and Jobs Act eliminated the moving expense deduction and exclusion from income of moving expense payments by employers who move their employees through 31 December, 2025. This removal negatively impacts individuals and companies who pay relocation expenses and provides no tax relief for when moving for a job.
Reinstating the moving expense deduction and exclusion – which enjoyed more than 50 years of bipartisan congressional support – would benefit:
- The Middle Class: Over 75 percent of taxpayers who claimed the deduction earned under $100,000 per year, with only 7 percent of taxpayers earning over $200,000. The majority of corporate transferees earn between $90,000 and $130,000;
- Small Businesses: Growing companies can reduce costs if they can claim a tax deduction when moving a new hire;
- U.S. Taxpayers: It costs U.S. businesses up to $2 billion more per year and federal agencies approximately $150 million more per year to move employees without the deduction, which is money otherwise spent on investing in the workforce; and
- Moving Companies: Over 75 percent of employers involved in moving and relocation are small businesses that support over 480,000 jobs. Reinstating the exclusion is of necessary assistance to lower the cost of moving, which will encourage more moves.
For these reasons, the associations that collectively represent the workforce mobility and relocation industry respectfully asked that reinstatement of the moving expense deduction and exclusion be made effective from January 1, 2021.