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PCS: Reimbursable Relocation Income Tax

Relocation Income Tax Allowance (RITA) is intended to reimburse you for substantially all of the additional federal, state, and local income taxed incurred as a result of reimbursement or payment of certain travel and transportation expenses and PCS allowances that are not excludable from gross income for Federal income tax purposes.

Taxable reimbursements include:

  • All payments for house hunting trips
  • Temporary quarters
  • Meals for en route travel
  • Miscellaneous expenses
  • HHG Storage more than 30 days
  • The sale of the old residence
  • The purchase of a new residence
  • Lease expenses
  • The relocation income tax allowance
  • Third party payments are also considered income--for example, if the government pays a moving company $1,000 for the second 30 days of storage on household goods, that payment is considered income to the employee.

Non-Taxable reimbursements include:

  • HHG shipment
  • HHG storage for the first 30 days
  • En route travel (lodging and transportation, to include government issued airline tickets)

The taxable reimbursements are taxable to you in the calendar year in which you are reimbursed, not the year the expense is incurred. A PCS W-2 will be issued by the paying travel office by Jan. 31 of the year following the year of the reimbursement.

Withholding Tax Allowance
Each time covered reimbursements are paid, a withholding tax allowance (WTA) is computed to reimburse you for Federal taxed paid on these covered reimbursements. WTA is a derived advance against RITA and is subtracted from any RITA allowance.

To get more PCS tips or information, visit Military.com's PCS section.

Related Topics

PCS OCONUS Military Taxes