PCS Taxes and RITA/WTA Relief
information posted April 8, 2019
Background on PCS Tax Issue
Under the Tax Cuts and Jobs Act of 2017, most moving allowances and assistance provided to federal civilian employees to help them with Permanent Change of Station (PCS) moves were made taxable beginning with the 2018 tax year.
In general, all allowances/assistance/reimbursements for PCS moving expenses are now taxable. Exceptions are usually made for long-term storage of household goods and for shipments of privately-owned vehicles, though civilian employees are always advised to consult with a qualified tax professional if they have any doubts about taxes they may owe.
Civilian employees who incur a tax burden on PCS allowances/assistance incurred as part of a move deemed to be for the benefit of the federal government (such as a DoDEA employee relocating because of being excessed/reassigned to a new location) may be able to apply for relief through the Relocation Income Tax Allowance (RITA) program. RITA reimburses eligible federal civilian employees for qualified federal, state and local taxes they incur on relocation benefits.
Employees who believe they are eligible to receive RITA must apply for it -- it is not awarded automatically to eligible employees -- in the year after receiving taxable moving assistance. This means, for example, if you received taxable assistance sometime in 2018 you would apply for RITA in 2019. An important thing to remember is that RITA benefits are considered taxable income the year after you receive them.
Information on RITA and how to apply for it has been posted by DoDEA at this page. Be sure to see the Fact Sheet on Tax Law Changes at the bottom of that page.
Special Information for Retiring/Separating and Incoming Civilian Employees
RITA and other assistance are currently not available to civilian employees who are retiring/separating from federal service or for newly hired/rehired civilian employees. This is especially harmful to DoDEA employees at overseas locations as they enter or leave employment and receive moving assistance in relocating between CONUS and an overseas duty station.
FEA and NEA have been urging lawmakers to pass legislation to extend assistance to such incoming and departing civilian employees. Updates on those efforts are included in the links at the bottom of this page.
Assistance from NEA-Member Benefits
While providing RITA or other assistance to incoming/departing civilian employees and/or completely eliminating the PCS on all civilian feds remain the ultimate goal of FEA/NEA, FEA has been exploring options to help members impacted by these recent changes.
The NEA Personal Loan Program offered through NEA Member Benefits may be an ideal solution to help incoming/departing feds not eligible for RITA or to assist current employees you bridge the gap until you receive your full RITA reimbursement. With fixed rates, no application fee, no processing or pre-payment penalties, members that qualify can secure the funds needed to cover unexpected taxes until the reimbursement process is complete. Click here to learn more and start the application process.
For any questions about the product or help with accessing the website, contact NEAMB's Member Service Center at 800-637-4636.
- DoDEA Info on the PCS Taxes and Applying For RITA
link will take you to the DoDEA Web site to view information on the application process for RITA and background about the PCS tax issue
- Bipartisan Tax Fix Reintroduced
posted on FEAonline March 18, 2019
- DoDEA Releases Info on PCS and Tax Changes
posted on FEAonline March 11, 2019
- Further Relief From Moving Taxes Unlikely In 2018
posted on FEAonline November 23, 2018
- Update on Taxable Moving Allowances
posted on FEAonline October 25, 2018
- Bipartisan Group of Senators Proposes Fix to Tax on Moving Allowances
posted on FEAonline July 19, 2018
- GSA Guidance on Taxes
posted on FEAonline May 24, 2019
- NEA Member Benefits Personal Loan Program
incoming/outgoing members not eligible for RITA or current employees in need of funds while awaiting RITA reimbursements may wish to check out this loan program