GSA Guidance On Taxes

TO: FEA Members Worldwide
FROM: FEA Washington DC Office
RE: Update on Taxes for Travel, Transportation and Relocation Expenses
DATE: May 24, 2018

We wanted to update our members about the situation involving taxes on relocation and other travel expenses.

Last week, the General Services Administration issued a memo (available here) offering additional information and guidance on some of the tax issues that have arisen as a result of the new tax law enacted last year.

The GSA memo authorizes agencies to pay Withholding Tax Allowance (WTA) and Relocation Income Tax Allowance (RITA) to cover "substantially all" of the increased tax liability for relocation expense reimbursements paid directly or indirectly to employees who are transferred "in the interest of the Government" from one official station or agency to another for permanent duty.

FEA interprets this to mean that current DoDEA employees who are reassigned/transferred from one DoDEA location to another would have to pay taxes for any government-provide moving assistance (including things like shipment of household goods, airfare or other transportation to a new location, lodging en route to the new location, etc. -- see the full list of relocation expense reimbursements now taxable in item #5 of the GSA memo). However, employees moving from one location to another in the interest of the Government (this would include DoDEA employees being relocated due to transfers and excessing) can then apply for WTA or RITA to be reimbursed for "substantially all" the taxes these employees would have to pay on moving services/reimbursements provided to them by the government.

The WTA and RITA reimbursements are NOT authorized for current employees who are separating from federal service (due to things such as retirement, resignation or termination from DoDEA). Nor are those reimbursements authorized for new employees just entering the system.

This means the tax burden on people coming into or exiting employment with DoDEA will remain in place, creating a massive financial hardship for these individuals. FEA/NEA and our partners in other agencies representing federal employees will continue pushing for a legislative fix to this incredibly unfair tax situation, in hopes that something can be passed during this tax year to eliminate this burden from separating and incoming employees. We are also calling upon DoDEA management to be forthright with new hires by informing them of this situation and the tax burden that will be placed upon them if they are relocated by the government from CONUS to another location to work in DoDEA.

FEA realizes this situation is creating a lot of stress and hardship for members, especially those who are departing DoDEA at the end of this school year. We will continue to update our members throughout the year as this situation develops.