With the passage of the Tax Cuts and Jobs Act, pastors can no longer deduct moving expenses. Still, many have wondered if the tax-free suspension applies to expenses earlier than 2018 but paid for or reimbursed in 2018. IRS Notice 2018-75, posted on IRS.gov in September, clarified that the tax-free suspension does not apply to reimbursements or payments made in 2018 for expenses incurred in a prior year, reported CapinCrouse.
CapinCrouse offered three additional insights: (1) payments or reimbursements must be for work-related moving expenses that would have been deductible to the employee if the employee had paid them before January 1, 2018; (2) the employee must not have deducted the expenses in 2017; and (3) if an organization has already treated employee reimbursements or payments as taxable, it can follow the normal tax adjustment and refund process.
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