Warner-Kaine-Collins Relocation Expense Parity Act

The Relocation Expense Parity Act closes the last gap of federal workers who cannot get
reimbursed for the additional taxes on moving costs reimbursements. About 95% of federal
workers are already covered, but the remaining 5% need a legislative fix to get relief.

Background: Some federal employees are eligible to have their moving costs paid by the
government. For many years, the federal government also could cover any additional taxes due
when it pays these moving costs (a “gross-up” in tax terminology). This tax cost has historically
been either nothing or very small, but the 2017 tax bill changed the deduction/exclusion for
moving costs, and now almost all moving cost payments are taxable income. Following a letter
from Sens. Warner and Kaine, GSA clarified their rules so that agencies should still gross-up
most employees. About 95% of federal workers are now able to get repaid for taxes on moving
costs.

Left behind: A small slice of workers who get moving reimbursements are still not eligible
(generally, new employees and retiring employees). These federal workers owe taxes on their
moving costs, and the government cannot cover the costs.

The Warner-Kaine-Collins Relocation Expense Parity Act closes this gap. Any federal employee
eligible for having moving costs paid would also be eligible for a tax gross-up.

Who is affected: While it applies to many federal workers, there are some specific agencies
where the costs are more likely to cause recruitment problems in key areas.

For example, the Department of Defense employs thousands of teachers for their elementary,
middle, and high schools across the globe, teaching the children of military families. Moving
new teachers to distant locations, like one of the 20 schools in Japan, can lead to tens-of-
thousands of dollars of extra income. It also heavily affects other departments where transfers
upon being hired are more likely, such as the FBI. These workers are facing thousands of dollars
of extra costs for taking these important jobs.