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Bipartisan Tax Fix Reintroduced

POSITIVE NEWS ON PCS TAXES

posted March 18, 2019

A bipartisan group of Senators has reintroduced legislation that would provide relief from PCS moving taxes to incoming and retiring/separating federal employees.

The Relocation Expenses Parity Act was reintroduced by Senators Mark Warner, Tim Kaine, Susan Collins, Chris Van Hollen and Mazie Hirono. If passed, it would provide for Relocation Income Tax Allowance (RITA) and Withholding Tax Allowance (WTA) benefits to incoming and exiting civilian federal employees who are taxed on allowances and assistance provided to them as part of PCS moves. Currently, only existing federal employees who PCS for the benefit of the federal government are able to take advantage of RITA and WTA. Incoming and separating/retiring employees are specifically prohibiting from RITA/WTA assistance, meaning they are faced with thousands of dollars in taxes on their PCS moves with no relief available.

FEA/NEA and numerous other organizations representing federal employees have been working with decision makers on Capitol Hill to push for this relief ever since the 2017 tax overhaul made PCS moving services and allowances provided to civilian employees taxable. The federal government later announced that RITA and WTA would be provided to current employees who move from one duty station to another, if that move is for the benefit of the government, but that definition left out employees who are retiring/separating or who are just entering federal service.

FEA Executive Director H.T. Nguyen and retired FEA member Alex Veto were among individuals quoted in materials released by the Senators, explaining the present situation and illustrating the need for relief from the PCS tax.

The Relocation Expenses Parity Act mirrors legislation that the same bipartisan group of Senators first proposed in 2018, but that legislation failed to advance. It is hoped lawmakers will now recognize the urgent need to provide similar tax assistance to incoming/outgoing civilian employees.

FEA will keep members updated on the progress of this bill and let you know if there is anything you can do. Current employees who PCSd in 2018 and have been taxed on the moving assistance/allowances you received are advised to go to this page on DoDEA's site to learn more about RITA/WTA and how you can apply.