Relocation Allowance

Standing Authorization Regarding Relocation Allowances Memo

Non-Salary & Deferred Compensation Form (rev. 02/2019)

Policy 05.15.03 Non-Salary and Deferred Compensation  (rev. 02/2019)

Effective January 1, 2018 moving expense reimbursements are fully taxable as income. As a result of this change to the tax law, NC State is providing the following relocation allowance guidelines to provide greater flexibility to the University and its employees. The following information includes updated procedures and requirements for the awarding and processing of approved relocation allowance payments to EHRA employees. Relocation allowances granted must comply with POL 05.15.03 (Non-Salary and Deferred Compensation), be authorized in advance, and paid from non-state-appropriated funds.

In order to encourage the recruitment of talented employees to the University, NC State allows the payment of three types of relocation expenses: household moving expenses; house hunting expenses; and temporary housing. All three types of expenses will be covered under one relocation allowance.

A. DEFINITIONS:

1. Household Moving Expenses: An allowance to cover costs for movement of household goods and personal effects of the employee and their immediate family.

2. House Hunting Expenses: An allowance to cover employee travel and subsistence for up to a maximum of 4-days/3 nights, for the purpose of house-hunting with family.

3. Temporary Housing: An allowance for the cost of temporary housing is authorized for top executive officers (JCAT 1A), senior institutional/chief functional officers (JCAT 1B), tenured full professors (JCAT 200), head coaches (JCAT 498) and assistant coaches (JCAT 499).

B. AUTHORIZATION:

The Chancellor, Executive Vice Chancellor and Provost, Vice Chancellor, or Athletic Director may authorize relocation allowances (up to  the designated limits shown in section D) as part of an initial appointment offer for permanent full-time tenured, tenure-track, non-tenure track faculty; coaches, assistant coaches, assistant/associate athletic directors; and other EHRA non-faculty employees.

C. PROVISIONS / PROCESS:

1. Allowances for moving and house hunting expenses are now fully taxable to the employee. Human Resources, Accounts Payable, and Payroll will no longer require supporting documentation or receipts, other than the Non-Salary and Deferred
   Compensation Form, when submitting a relocation allowance request to be paid to the employee.
2. Key considerations in determining relocation allowances should include geographic origin of the move and distance to Raleigh (or other primary work location), unique household circumstances, or other market considerations. In determining the allowance, however, units should give consideration to the taxable nature of these payments. Since the allowance includes house hunting, moving household goods, and temporary housing, prudent consideration should be given as to the estimated expense for all items.
3. When submitting a hiring proposal that includes a relocation allowance, the hiring department should complete and obtain approvals of the Non-Salary and Deferred Compensation Form at that time. The offer letter and addendum will need to reflect the relocation allowance and acknowledgement of the possible repayment. The Non-Salary and Deferred Compensation Form must be completed and approved as required prior to requesting payment through the Accounts Payable system.
4. All relocation allowances will be paid by Accounts Payable electronic funds transfer or direct deposit. Allowances can be broken into incremental payments in order to better match employee and departmental circumstances, or may be paid in one lump sum. All amounts will be included as imputed income by the Payroll Department, and payroll taxes will be deducted in the employee’s next paycheck(s).
5. To pay the relocation allowance to the employee, the hiring department will enter a voucher(s) using the completed Non-Salary and Deferred Compensation Form as backup documentation for the voucher(s). No vouchers will be processed without a properly completed and approved Non-Salary and Deferred Compensation Form. Funding for all allowances must be non-state funds using account code 51530 and category ID NA25.
6. Relocation allowances should only be paid to an employee and not on behalf of an employee with a P-card or NCSU Marketplace, NCSU Purchase Order, or directly to a vendor.
   o If such payments are discovered, the expense will be added to the employee’s wages after-the-fact and the department will be responsible for providing backup documentation with exception approvals in accordance with NCSU policies.
   o The employee will be responsible for related federal and state income and FICA tax withholdings, which will be deducted from the employee’s regular pay.
7. It is the responsibility of the hiring department to maintain a copy of the Non-Salary and Deferred Compensation Form and to ensure that the employee is paid the appropriate amount, even if completed in installments.

D. ELIGIBILITY:

Relocation allowances are available for full-time, permanent SAAO-I, SAAO-II, EHRA faculty (tenured, tenure-track, non-tenure track), and EHRA non-faculty positions.

E. RELOCATION ALLOWANCE MAXIMUMS:

The following relocation allowances, as designated by the Chancellor, are the maximum amounts permitted. Not every offer / appointment is intended or required to include such payment and its inclusion should be based on business necessity to attract well-qualified candidates, and contingent upon the availability of funds. These amounts are the maximum amount to be paid, not the minimum or expected amounts. Any exceptions to these maximum amounts require pre-approval from the appropriate supervising management level, i.e. Chancellor, Executive Vice Chancellor and Provost, or supervising Vice Chancellor.

SAAO Tier 1 $25,000
SAAO Tier 2 $20,000
Faculty $15,000
Other Non-Faculty EHRA $10,000
Athletics $25,000

F. EXCEPTIONS

Exceptions to the eligibility requirements and/or approved maximum rates require pre-approval from the appropriate management level, i.e. Chancellor, Executive Vice Chancellor and Provost, or supervising Vice Chancellor. Exception payments will be limited to the actual amount of relocation expenses incurred, up to the designated exception amount, supported by receipts.

G. SEPARATION FROM EMPLOYMENT:

Employees that separate (either voluntarily or involuntarily) from University employment prior to one year of completed employment may be required to fully reimburse the University at the gross amount of any allowance received.
The employee will work with the hiring department to determine the amount to be repaid. It will be the responsibility of the hiring department to collect any required
reimbursement of relocation expenses from the employee. Repayment should be made directly to the department outside of the payroll system. No tax withholding or reporting adjustments will be made by the Payroll Office. The employee will need to consult their tax professional for advice on including the excess tax as part of their Federal Income tax filing for the year to recoup taxes paid.

Athletic & Cultural Events

Description

Employees in positions eligible for free admission to university-related athletic or cultural events for job-related purposes are authorized by POL 05.15.03 for Non-Salary and Deferred Compensation.

Recurring (or season ticket) admission to athletic or cultural events provided to an EPA employee for non-business-related purposes must be authorized in advance on a case-by-case basis by the Board of Trustees (BOT); the value is considered reportable and taxable income.  The Non-Salary & Defferred Compensation Form must be completed, approved and submitted prior to payment.

Single-use tickets to campus events that could not otherwise be sold (and thus have no market value) may be distributed on a nondiscriminatory basis as occasional employee recognition/ appreciation awards by the chancellor, vice chancellor or dean.  Single-use tickets are not reportable or taxable.

Taxation of Tickets

The value of tickets, other than single-use tickets, provided to an EPA employee for non-business-related purposes is considered taxable income and included in the taxable grosses for social security, Medicare, federal, and state reporting.  Social security (OASDI) and Medicare taxes (Fed-Med) are withheld on the paycheck.

Responsible People

Employee: The employee has no reporting responsibility

College or Department:  Colleges or departments are not required to report to University Payroll tickets provided to individuals in positions authorized by this policy, by the athletic director’s position-based schedule or a recipient approved by the BOT as an exception so long as the event tickets are for job-related purposes.  If not deemed job-related, the college or department must provide – on a memo or spreadsheet – the following information to University Payroll:

• Employee Name
• Employee ID number
• Value of tickets
• Pay cycle of employee (biweekly or monthly)
• Status of employee, if not currently active (LOA, terminated, etc.)

The schedule for providing the information to University Payroll is based on the type of tickets, as follows:

• Football season ticket information is due by October 1st of each year.
• Basketball season ticket information is due by November 15th of each year.
• All other ticket information is due on a quarterly basis by the 5th of April (for quarter ending March 31), July (for quarter ending June 30), October (for quarter ending September 30) and January (for quarter ending December 31)
• Special note – submit immediately if employee terminates

University Payroll: Based upon the information provided by the department, University Payroll will enter the taxable value into the HR System using the appropriate earnings code:

• EA1 EventAthl – Events – Athletic
• ECI EventOther – Events – Cultural/Oth

Discounts and Privileges

Description

The restrictions for discounts on products or services (whether regular or occasional) offered to employees are specified in POL05.15.03 for Non-Salary and Deferred Compensation.  Discounts or privileges not listed in the policy must be approved, in advance, by the Board of Trustees.  The Non-Salary and Deferred Compensation Form must be completed.

Taxation of Discounts and Privileges

The value of discounts and privileges that are waived, exceed the 20% threshold set by IRS, or provided to employees not authorized by the policy as a working condition fringe benefit, must be reported to University Payroll as taxable compensation.  The compensation will be included in the taxable grosses for social security, Medicare, federal, and state reporting.  Social security (OASDI) and Medicare taxes (Fed-Med) are withheld on the paycheck.

Responsible People

Employee: The employee has no reporting responsibility

College or Department: The college or department must report to University Payroll on a monthly or quarterly basis (or immediately for employees who terminate) the following information:

• Employee name
• Employee ID number
• Type of discount (meals, product or service)
• Date(s) discount was provided
• Dollar amount of the discount

University Payroll: Based on the information provided by the department, University Payroll will enter the taxable value into the HR system using the appropriate earnings code:

• DM1 – DiscMeals – Discount Meals
• DP1 – DiscProd – Discount Products
• DS1 – DiscServ – Discount Services

Employer-Provided Benefit – Educational Assistance

Description

Any educational assistance benefit given not governed by REG 07.55.8 for Tuition Waiver for Faculty and Staff – Procedures must be authorized in advance by the Board of Trustees (BOT) on a case-by-case basis, per POL 05.15.03 for Non-Salary and Deferred Compensation.  The Non-Salary and Deferred Compensation Form must be completed, approved and submitted prior to payment.

Taxation of Payment

The value of the excess qualified educational assistance (> $5,250/year) is reported as taxable compensation included in the taxable grosses for social security, Medicare, federal, and state reporting.  Social security (OASDI) and Medicare taxes (Fed-Med) are withheld on the paycheck. Non-qualified tuition assistance exceptions approved by the BOT, are taxed at the full value.

Responsible People

Employee: The employee has no reporting responsibility

College or Department: The college or department has no reporting responsibility for assistance covered by REG 07.55.8; however, the college or department must inform University Payroll of educational assistance exceptions approved by the Board of Trustees.

University Cashier’s Office: It is the responsibility of the University Cashier’s Office to report the employees with tuition waiver amounts in excess of $5,250/year on a spreadsheet to the University Payroll.  The following information should be included:

• Employee name
• Employee ID number
• Total dollar amount waived

The reporting schedule of the tuition waiver is:

• Spring Semester – Spreadsheet due by April 30th
• Fall Semester – Spreadsheet due by October 31st
• Summer Semester – Spreadsheet due by August 31st

University Payroll: Based on information submitted by the University Cashier’s Office, University Payroll will add the tuition value > $5,250 as compensation using the following earnings code and withhold applicable taxes:

• TG1 – Tuition Grad Excess

All Other Non-Salary Compensation

Description

Per POL 05.15.03 for Non-Salary and Deferred Compensation, any other form of non-salary compensation or benefit not specifically detailed in the policy, must be authorized in advance on a case-by-case basis by the Board of Trustees (BOT).  If approved, the non-salary compensation is treated as taxable income.  The Non-Salary and Deferred Compensation Form must be completed, approved and submitted prior to payment for the following miscellaneous categories of non-salary compensation:

• Cash
• Gifts or gift certificates (Note: Gift cards/certificates should not be purchased using a departmental PCard.)
• Prizes:  Prizes do require advance BOT approval with one exception.  As an established practice during the State Employees’ Combined Campaign (SECC), a university program’s use of recognition prizes to promote annual enrollment is considered authorized.  Whether authorized by policy or by BOT approval, the value of the associated cash award, gift certificate or prize is reportable as compensation and taxed appropriately.
• Additional time off
• Parking fee waivers
• Payment of visa-related fees for family members of a non-resident foreign national employee
• Access to special campus services or benefits
• Compensation paid through Financials (post-payment review concludes payment was to employee and should be treated as compensation in the HR System)
• Awards:  Established, one-time programs administered at the college/division, university, or UNC level, such as those listed on Awards and Honors are generally considered authorized; other awards may require advance BOT approval (and submission of the Non-Salary Compensation Form).  Whether authorized by policy or by BOT approval, the value of the associated cash award, gift certificate or prize is reportable as compensation and taxed appropriately. Note: Length-of-service and safety awards that do not exceed $400 per employee per year are tax exempt when awarded in a meaningful presentation.

Taxation of Payment

The value of cash awards, gift certificates, prizes, etc. is treated as taxable compensation and included in the taxable grosses for social security, Medicare, federal, and state tax reporting.  Social security (OASDI) and Medicare taxes (Fed-Med) are withheld on the paycheck.  Cash awards, gift certificates, and compensation paid through Financials are also subject to federal and state tax withholding on the paycheck.

Responsible People

Employee: The employee has no reporting responsibility

College or Department: The college or department must appropriately idenify the payment type as it is submitted through the Financials System.

University Controller’s Office or Foundation Accounting and Investment Office: Payments for one of the miscellaneous non-salary compensation items must be compiled onto a spreadsheet by the University Controller’s Office or Foundations Accounting and Investment Office and reported to University Payroll by the 5th of each month for the previous month.  The spreadsheet should include:

• Employee name
• Employee ID number
• Dollar amount/value of payment
• Reason for payment/gift/prize
• Pay Cycle of employee (Bi-weekly or Monthly)
• Voucher Number

University Payroll: Based on the information submitted by the University Controller’s or Foundations Accounting and Investment Offices, University Payroll will enter the taxable value into the HR System using the appropriate earnings code:

• CA1: Compensation Paid by Accounting
• GC1: Gift Certificate
• GP1: Gift/Prize
• RA1: Recognition Award UNC System
• RA2: Recognition Award NCSU
• RA3: Recognition Award College/Division
• RA4: Recognition Award Department approved by Board of Trustees
• RA5: Recognition Award Other approved by Board of Trustees

Incentive Compensation

Description

Participating as a Research Subject.    POL 05.15.03 for Non-Salary and Deferred Compensation authorizes incentive payments to employees who participate in an approved NCSU research study.  Such payments are compensation that is reportable and taxable.  Payments may be in the form of cash, processed through the HR System by the department; or, a gift certificate with a specific face value.  The value of gift certificates purchased by the department and given to an individual who is an employee must be reported to University Payroll. (Note: Gift cards/certificates should not be purchased using a departmental PCard.)

Teaching Executive Education.   POL 05.15.3 also authorizes compensation paid from NCSU-associated entities to faculty who teach in executive education or comparable programs; however, payments in excess of 20% of the faculty member’s base salary (from all sources including supplemental or overload pay that is subject to the 20% overload limit) require approval on a case-by-case basis by the chancellor, on the recommendation of the dean and provost.

Athletics Bonuses.  Incentive payments provided to any Athletics employee for reasons including (but not limited to) reaching performance goals such as post-season playoffs or student academic achievement levels, must be approved in advance by the Board of Trustees.  The Non-Salary and Deferred Compensation Form must be completed, approved and submitted prior to payment.  (The athletic director and head coaches with contracts are covered by UNC Policy 1100.3 for this type of compensation and therefore, exempt from this policy.)

Any other form of incentive-based compensation beyond base salary for achieving performance or productivity goals, is prohibited unless expressly authorized by the UNC Board of Governors.

Taxability of Payment

Cash incentive payments are entered by the department/college for inclusion in the employee’s paycheck, and are subject to social security (OASDI), Medicare (Fed-Med), federal withholding, and state withholding taxes.  In addition, such payments are subject to retirement if paid to a retirement-contributing employee.

The value of non-cash incentive payments (gift certificates) is reportable and included in the taxable grosses for social security, Medicare, federal, and state tax reporting.  Social security (OASDI) and Medicare taxes (Fed-Med) are withheld on the paycheck.

Responsible People

Employee:  The employee has no reporting responsibility.

College or Department:   The college or department is responsible for entering the cash incentive payment into the Time and Labor module of the HR System, using the appropriate earnings/time reporting code (TRC):

• IP1 – IncentPay – Incentive Pay
• AP1 – AthPerfInc – Athl Performance Inc

University Controller’s Office:  Non-cash incentive payments must be compiled onto a spreadsheet by the University Controller’s Office and reported to University Payroll by the 5th of each month for the previous month.  The spreadsheet should include:

• Employee name
• Employee ID number
• Date the gift certificate was provided
• Dollar value of gift certificate

University Payroll:  University Payroll will include incentive payments entered into Time & Labor by departments, as part of the regular payroll processing.  The value of gift certificates reported by the University Controller’s Office will be processed in the HR System using the earnings code of GC1.