Relocation tax break on hold for now
Federal employees hoping to be reimbursed for expenses incurred during moves to different work locations last year will have to wait a bit longer. The official formulas needed to calculate the relocation income tax allowance can't be published in the Federal Register yet and thereby be made official, according to the General Services Administration. The relocation income tax allowance (RITA) is designed to reimburse federal travelers for federal, state and local income taxes incurred while relocating. When federal employees file reimbursement vouchers for moving costs, taxes are withheld because the Internal Revenue Service treats the money like income. To get the taxed money back, employees must file a claim with their agency, and the agency calculates the tax allowance using the RITA tables. If too much was withheld from the expense voucher, the employee gets a refund. If too little was withheld, the employee gets a bill. Updated tax tables are usually published at the beginning of each year as part of the Federal Travel Regulations, which set government travel policy, but the 2001 RITA tables can't be released due to a memo issued by the new administration on Jan. 20.
The memo put a hold on all new and pending regulations until Bush appointees can review them. The Bush administration's choice for GSA administrator, Stephen A. Perry, hasn't yet been confirmed. GSA posted proposed RITA tables on its Web site on Monday and said agencies may use the information at their discretion. Agency officials said they anticipate the official tax tables will be released when GSA's new administrator is confirmed.