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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29558
Experience:  Taxes, Immigration, Labor Relations
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My employer wanted to relocate from Texas to California My

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My employer wanted to relocate from Texas to California My payroll will be chaged to California on Dec 16, 2012 but I will move to there early Jan 2013.
My company will pay me some cash as relocation allowance. It will be show up on my Dec 31, 2012 pay check as salary income.
If I plan to ask the mover to pick up my household goods in Texas on Dec 31, should I report the relocation tax credit on my 2012 or 2013 tax return? Is it better to let the mover pickup my housegood on Jan 2?

LEV :

Hi and welcome to Just Answer!
You will be able to deduct your moving expenses in the year you actually move. Thus - if you move to California in Jan 2013 - you will claim deduction for moving expenses on your 2013 tax return.

LEV :

When your employer will pay you for relocation - such payment is generally reported as your wages and will be taxed based on when paid. Thus - if such payment will be made on Dec 31, 2012 - it will be taxable on your 2012 tax return.
Asking the mover to pick up your household items in Texas on Dec 31 would not affect deduction of your moving expenses - which will be based on when you personally will arrive at destination. Only if you move California - for instance - on Dec 16, 2012 - you will claim your moving expenses on 2012 tax return.
If you have a choice to move either in 2012 or in 2013 - you might better to choose the year in which your income is higher.

Customer:

Lev, thanks for the answer. I forgot to mention 1 thing before.

Customer:

My employer in Texas and California is the same. My employer will transfer my pay roll to California on Dec 16. I plan to be california for house huting trip Dec 15 to 23 and spend some time in the California. I will stay in Texas from Dec 23 to early Jan 2013. I will officially move to California in Jan 2013. In this situation, am I counted moving to California on Dec 16 or Jan 2013?

LEV :

Yes - for moving expenses deduction purposes - you are considered as moved to the destination - when you physically arrive there. If you physically arrive to California on Dec 16, 2012 - you will claim your moving expenses on 2012 tax return.

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