Title 41—Public Contracts and Property Management--Volume 1
PART 302-1—GENERAL RULES
§ 302-11.2   Am I eligible to receive an allowance for expenses incurred in connection with my residence transactions?
(a) You must meet four basic conditions to be eligible to receive an allowance for expenses incurred in connection with your residence transactions:
(1) You must be transferring from one official station to another;
(2) Your relocation must be incidental to the transfer ( i.e. , not for the convenience of the employee);
(3) Your relocation must meet the distance test conditions of § 302-2.6; and
(4) Your new official station must be within the United States.
(b) If you previously transferred from an official station in the United States to a foreign area and you are now transferring back to the United States, then, in addition to the requirements of paragraph (a) of this section, you must have completed the time period specified in your service agreement for your overseas tour of duty.
§ 302-11.3   Must I sign a service agreement before receiving residence transaction allowances?
Yes, you must sign a service agreement before receiving residence transaction allowances.
§ 302-11.4   Who is not eligible to receive an allowance for expenses incurred in connection with residence transactions?
You are not eligible to receive an allowance for expenses incurred in connection with residence transactions under this subpart if you are:
(a) A new appointee; or
(b) An employee assigned under the Government Employees Training Act (5 U.S.C. 4109).
§ 302-11.5   To be reimbursed for expenses incurred in my residence transactions, must I occupy the residence at the time I am notified of my transfer?
Yes, to be reimbursed for expenses incurred in your residence transactions, you must occupy the residence at the time you are notified of your transfer, unless your transfer is from a foreign area to an official station within the United States other than the one you left when you transferred out of the United States, as specified in § 302-11.2(b).
§ 302-11.6   For which expenses will I be reimbursed if I qualify for a residence transaction expense allowance?
If you qualify for a residence transaction expense allowance, you may be reimbursed for the:
(a) Expenses of selling your old residence and purchasing a new residence in the United States; or
(b) Settlement of an unexpired lease at your old official station in the United States from which transferred to another official station in the United States or when assigned to a foreign post of duty; and
(c) Expenses of purchasing a new residence in the United States upon return to the United States upon completion of the foreign tour of duty and the return is to a different official station, and is 50 miles distance from the official station which you transferred from.
§ 302-11.7   When are expenses for my settlement of an unexpired lease reimbursable?
When your unexpired lease (including month to month) is for residence quarters at your old official station, you may be reimbursed for settlement expenses for an unexpired lease, including but not limited to broker's fees for obtaining a sublease or charges for advertising if:
(a) Applicable laws or the terms of the lease provide for payment of settlement expenses; or
(b) Such expenses cannot be avoided by sublease or other arrangement; or
(c) You have not contributed to the expenses by failing to give appropriate lease termination notice promptly after you have definite knowledge of your transfer; or
(d) The broker's fees or advertising charges are not in excess of those customarily charged for comparable services in that locality.
§ 302-11.8   Must I sell a residence at the old official station to be eligible to purchase a residence at the new official station?
No, you do not have to sell the residence at your old official station to be eligible for residence purchase transactions at your new official station.
§ 302-11.21   How long do I have to submit my claim for reimbursement of expenses incurred in connection with my residence transactions?
Your claim for reimbursement should be submitted to your agency as soon as possible after the transaction occurred. However, the settlement dates for the sale and purchase or lease termination transactions for which reimbursement is requested must occur not later than 1 year after the day you report for duty at your new official station. (See § 302-11.23.)
§ 302-11.22   May the 1-year time limitation be extended by my agency?
Yes, your agency may extend the 1-year limitation for up to one additional year for reasons beyond your control and acceptable to your agency.
§ 302-11.23   When must I request to have my initial time period extended?
To have your initial time period extended, you must submit a request to your agency not later than 30 calendar days after the expiration date unless this 30-day period is specifically extended by your agency.
§ 302-11.100   For which residence may I receive reimbursement for under this subpart?
You may receive reimbursement for the one residence from which you regularly commute to and from work on a daily basis and which was your residence at the time you were officially notified by competent authority to transfer to a new official station.
§ 302-11.101   Must the title to the property for which I am requesting an allowance for residence transactions be in my name?
The title to the property for which you are requesting an allowance for residence transaction must be:
(a) Solely in your name; or
(b) Solely in the name of one or more of your immediate family members; or
(c) Jointly in your name and in the name of one or more of your immediate family members.
§ 302-11.102   How will the Government determine who holds title to my property?
The Government will determine who holds title to your property based on:
(a) Whose name(s) actually appears on your title document (e.g., the deed); or
(b) Who holds equitable title interest in your property as specified in § 302-11.105.
§ 302-11.103   How will I be reimbursed if I or a member of my immediate family do not hold full title to the property for which I am requesting reimbursement?
If you or a member of your immediate family do not hold full title to the property for which you are requesting reimbursement, you will be reimbursed on a pro rata basis to the extent of your actual title interest plus your equitable title interest in the residence.
§ 302-11.104   When must I and/or a member(s) of my immediate family have acquired title interest in my residence to be eligible for the allowance for expenses incurred in connection with the sale of my residence?
To be eligible for the allowance for expenses incurred in connection with the sale of your residence, you and/or a member(s) of your immediate family must have acquired title or equitable title interest in the residence as illustrated in the following table:
§ 302-11.105   How is it determined if I hold “equitable title interest” in my residence?
“Equitable title interest” in your residence is determined by your agency if:
(a) The title is held in trust, and:
(1) The property is your residence;
(2) You and/or a member(s) of your immediate family are the only beneficiary(ies) of the trust during either of your lifetimes;
(3) You and/or a member(s) of your immediate family retain the right to distribute the property during your lifetimes;
(4) You and/or a member(s) of your immediate family retain the right to manage the property;
(5) You and/or a member(s) of your immediate family are the only grantor/settlor of the trust, or retain the right to direct distribution of the property upon dissolution of the trust or death; and
(6) You provide your agency with a copy of the trust document; or
(b) The title is held in the name of a financial institution, and:
(1) The property is your residence;
(2) You and/or a member(s) of your immediate family executed a financing agreement (e.g., mortgage) with the financial institution;
(3) State or local law requires that lending parties take title to perfect ( i.e., protect) a security interest in the property, or the financial institution requires that it take possession of title as a condition of the financing agreement; and
(4) You provide your agency with a copy of the financing document; or
(c) The title is held both in the names of:
(1) You solely, or jointly with one or more members of your immediate family, or one or more members of your immediate family;
(2) An individual accommodation party as defined in § 302-11.106 who is not a member of your immediate family; and
(3) The conditions apply:
(i) The property is your residence.
(ii) You and/or a member(s) of your immediate family have the right to use the property and to direct conveyance of the property.
(iii) The lender requires signature of the accommodation party on the financing document.
(iv) You and/or a member of your immediate family, are liable for payments under the financing arrangement (e.g., mortgage).
(v) The accommodation party's name is on the title.
(vi) The accommodation party does not have a financial interest in the property unless the employee and/or a members(s) of the immediate family default on the financing arrangement.
(vii) You must provide documentation of the accommodation that is acceptable by your agency; or
(d) The title is held by the seller of the property and the following conditions are met:
(1) The property is your residence;
(2) You and/or member(s) of your immediate family has the right to use the property and to direct conveyance of the property;
(3) You and/or member(s) of your immediate family must have signed a financing agreement with the seller of the property (e.g., a land contract) providing for fixed periodic payments and transfer of title to the employee and/or a member(s) of the immediate family upon completion of the payment schedule; and
(4) You provide your agency with a copy of the financing agreement; or
(e) Another equitable title situation exists where title is held in your name only or jointly with you and one or more members of your immediate family or with you and an individual who is not an immediate family member, and the following conditions are met:
(1) The property is your residence.
(2) You and/or a member(s) of your immediate family has the right to use the property and to direct conveyance of the property.
(3) Only you and/or a member(s) of your immediate family has made payments on the property.
(4) You and/or a member(s) of your immediate family received all proceeds from the sale of the property.
(5) You must provide suitable documentation to your agency that all conditions in paragraphs (e)(1) through (e)(4) of this section are met.
§ 302-11.106   What is an accommodation party?
An accommodation party is an individual who signs an employee's financing agreement (e.g., a mortgage) to lend that individual's name ( i.e., credit) to the arrangement.
§ 302-11.200   What residence transaction expenses will my agency pay?
Provided the residence transaction expenses are customarily charged to the seller of a residence in the locality of the old official station or paid by the purchaser at the new official station, your agency will, with appropriate supporting documentation provided by you, reimburse you for the following residence transaction expenses when they are incurred by you incident to your relocation:
(a) Your broker's fee or real estate commission that you pay in the sale of your residence at the last official station, not to exceed the rates that are generally charged in the locality of your old official station;
(b) The customary cost for an appraisal;
(c) The costs of newspaper, bulletin board, multiple-listing services, and other advertising for sale of the residence at your old official station that is not included in the broker's fee or the real estate agent's commission;
(d) The cost of a title insurance policy, costs of preparing conveyances, other instruments, and contracts and related notary fees and recording fees; cost of making surveys, preparing drawings or plats when required for legal or financing purposes; and similar expenses incurred for selling your residence to the extent such costs:
(1) Have not been included in other residence transaction fees ( i.e., brokers' fees or real estate agent fees);
(2) Do not exceed the charges, for such expenses, that are normally charged in the locality of your residence;
(3) Are usually furnished by the seller;
(e) The costs of searching title, preparing abstracts, and the legal fees for a title opinion to the extent such costs:
(1) Have not been included in other related transaction costs ( i.e., broker's fees or real estate agency fees); and
(2) Do not exceed the charges, for such expenses, that are customarily charged in the locality of your residence
(f) The following “other” miscellaneous expenses in connection with the sale and/or purchase of your residence, provided they are normally paid by the seller or the purchaser in the locality of the residence, to the extent that they do not exceed specifically stated limitations, or if not specifically stated, the amounts customarily paid in the locality of the residence:
(1) Federal Housing Administration (FHA) or VA fees for the loan application;
(2) Loan origination fees and similar charges such as loan assumption fees, loan transfer fees or other similar charges not to exceed 1 percent of the loan amount without itemization of the lender's administrative charges (unless requirements in § 302-11.201 are met), if the charges are assessed in lieu of a loan origination fee and reflects charges for services similar to those covered by a loan origination fee;
(3) Cost of preparing credit reports;
(4) Mortgage and transfer taxes;
(5) State revenue stamps;
(6) Other fees and charges similar in nature to those listed in paragraphs (f)(1) through (f)(5) of this section, unless specifically prohibited in § 302-11.202;
(7) Charge for prepayment of a mortgage or other security instrument in connection with the sale of the residence at the old official station to the extent the terms in the mortgage or other security instrument provide for this charge. This prepayment penalty is also reimbursable when the mortgage or other security instrument does not specifically provide for prepayment, provided this penalty is customarily charged by the lender, but in that case the reimbursement may not exceed 3 months' interest on the loan balance;
(8) Mortgage title insurance policy, paid by you, on a residence you purchased for the protection of, and required by, the lender;
(9) Owner's title insurance policy, provided it is a prerequisite to financing or the transfer of the property; or if the cost of the owner's title insurance policy is inseparable from the cost of other insurance which is a prerequisite;
(10) Expenses in connection with construction of a residence, which are comparable to expenses that are reimbursable in connection with the purchase of an existing residence;
(11) Expenses in connection with environmental testing and property inspection fees when required by Federal, State, or local law; or by the lender as a precondition to sale or purchase; and
(12) Other expenses of sale and purchase made for required services that are customarily paid by the seller of a residence at the old official station or if customarily paid by the purchaser of a residence at the new official station.
§ 302-11.201   When may my reimbursement for loan assumption fees or other similar fees exceed the 1 percent as specified in § 302-11.200(f)(2)?
Reimbursement may exceed 1 percent (as specified in § 302-11.200(f)(2) only when you provide evidence that the higher rate:
(a) Does not include prepaid interest, points, or a mortgage discount; and
(b) Is customarily charged in the locality where the residence is located.
§ 302-11.202   What residence transaction expenses will my agency not pay?
Your agency will not pay:
(a) Any fees that have been inflated or are higher than normally imposed for similar services in the locality;
(b) Broker fees or commissions paid in connection with the purchase of a home at the new official station;
(c) Owner's title insurance policy, “record title” insurance policy, mortgage insurance or insurance against loss or damage of property and optional insurance paid for by you in connection with the purchase of a residence for your protection;
(d) Interest on loans, points, and mortgage discounts;
(e) Property taxes;
(f) Operating or maintenance costs;
(g) Any fee, cost, charge, or expense determined to be part of the finance charge under the Truth in Lending Act, Title I, Pub. L. 90-321, as amended, and Regulation Z issued by the Board of Governors of the Federal Reserve System (12 CFR part 226), unless specifically authorized in § 302-11.200;
(h) Expenses that result from construction of a residence, except as provided in § 302-11.200(e)(10); and
(i) Losses, see § 302-11.304.
§ 302-11.300   Is there a limit on how much my agency will reimburse me for residence transactions?
Yes, your agency will reimburse you no more than:
(a) Ten percent of the actual sales price for the sale of your residence at the old official station; and
(b) Five percent of the actual purchase price of the residence for the purchase of a residence at the new official station.
§ 302-11.301   How must I request reimbursement for the expenses I incur for my residence transactions?
To request reimbursement for the expenses you incur for your residence transaction, you must:
(a) Send your claim for reimbursement and documentation of expenses to your old official station for review and approval unless otherwise specified by your agency, and
(b) Follow your agency's procedures and submit appropriate voucher(s) along with any claim applications that your agency may require with appropriate documents specified in § 302-11.302.
§ 302-11.302   What documentation must I submit to my agency to request reimbursement for the sale of a former residence or the purchase of a new one?
To request reimbursement for the sale of a former residence or the purchase of a new one, you must submit to your agency:
(a) Copies of your sales agreement when selling a residence;
(b) Your purchase agreement when a purchasing a residence;
(c) Property settlement documents;
(d) Loan closing statements; and
(e) Invoices or receipts for other bills paid.
§ 302-11.303   Will the Government reimburse me for expenses incurred in connection with my residence transactions that are paid by someone other than me or a member of my immediate family?
No, the Government will not reimburse you for expenses incurred in connection with your residence transactions if they are paid by someone other than you or a member of your immediate family.
§ 302-11.304   Will my agency reimburse me for losses due to market conditions or prices at the old and new official station?
No, losses incurred due to market conditions or prices at your old and new duty station are not reimbursable when incurred by you due to:
(a) Failure to sell a residence at the old official station at the price asked, or at its current appraised value, or at its original cost; or
(b) Failure to buy a dwelling at the new official station at a price comparable to the selling price of the residence at the old official station; or
(c) Any losses that are similar in nature to (a) or (b).
§ 302-11.305   Will I receive reimbursement for any residence transaction expenses incurred prior to being officially notified of my transfer?
No, reimbursement of any residence transaction expenses (or settlement of an unexpired lease) that occurs prior to being officially notified (generally in the form a change of station travel authorization) is prohibited.
§ 302-11.306   How can I know if my expenses are reasonable and will be reimbursed by the Government?
You are responsible for the determination of reasonableness for your claimed expenses. To determine if your expenses are reasonable, you should, in coordination with your agency, contact the local real estate association, or, if not available, at least three different realtors in the locality in which your expenses will be incurred and request:
(a) The current schedule of closing costs which applies to the area in which you are buying or selling;
(b) Information concerning local custom and practices with respect to charging of closing costs which relate to either your sale or purchase and whether such costs are customarily paid by the seller or purchaser; and
(c) Information on the local terminology used to describe the costs specified in paragraph (b) of this section.
§ 302-11.307   May I receive an advance of funds for my residence transaction expenses?
No, you may not receive an advance of funds for your residence transaction expenses.
§ 302-11.308   How much will I receive for reimbursement when I purchase or sell land in excess of what reasonably relates to the residence site?
When you purchase or sell land in excess of what reasonably relates to the residence site, your reimbursement will be limited to a pro rata reimbursement of the land reasonably related to the residence site.
§ 302-11.309   What residence transaction expenses are reimbursable if an employee violates the terms of the service agreement?
If the employee violates their service agreement, no residence transaction expenses will be paid, and any amounts paid prior to such violation shall be a debt due the United States until they are paid by the employee.
§ 302-11.320   How must I request reimbursement for settlement of an unexpired lease?
To request reimbursement for settlement of an unexpired lease, you must itemize expenses (list all expenses separately) on a travel voucher and submit the voucher to your agency.
§ 302-11.321   How will I be reimbursed when I share a lease with someone else?
When you share a lease with someone else you will be reimbursed on a pro rata basis for that portion of the lease that you are responsible for.
§ 302-11.400   What policies and procedures must we establish?
You must establish internal policies and procedures to implement this part.
§ 302-11.401   Under what conditions may we authorize or approve a residence transaction expense allowance?
You may authorize or approve a residence transaction expense allowance when an employee is performing a permanent change of station in the interest of the Government and has signed a service agreement (other than a new appointee or an employee assigned under the Government Employees Training Act (5 U.S.C. 4109.); and
(a) The old and new official stations are located in the United States; or
(b) The employee has completed an agreed upon tour of duty overseas and is returning to the United States to an official station that is at least 50 miles away from the employees last official station in the United States; or
(c) When the employee has been permanently assigned to a temporary official station.
§ 302-11.402   Who is not eligible to receive residence transaction expense allowances?
The following are not eligible to receive residence transaction expense allowances:
(a) New appointees; and
(b) Employees assigned under the Government Employee's Training Act (5 U.S.C. 4109).
§ 302-11.403   What policies must we establish before accepting documentation from an employee for reimbursement of residence transaction expenses?
You must establish policies that will define what documentation is acceptable from an employee when requesting reimbursement of residence transaction expenses.
§ 302-11.404   What controls must we establish for paying allowances for expenses incurred in connection with residence transactions?
When paying allowances for expenses incurred in connection with residence transactions, you must:
(a) Determine who will authorize and approve residence transactions expenses on the employee's travel authorization;
(b) Determine who will review applications for reimbursement of residence transaction expenses;
(c) Determine who will authorize extensions beyond the 1-year limitation for completing sales and purchase or lease termination transactions, under §§ 302-11.420 and 302-11.421;
(d) Prescribe a claim application form which meets your internal administrative requirements;
(e) Require employees to submit a travel claim with appropriate documentation to support the payment of the expenses claimed, which must include as a minimum;
(1) The sales agreement,
(2) The purchase agreement,
(3) Property settlement documents,
(4) Loan closing statements, and
(5) Invoices or receipts for other bills paid; and
(f) Require employees to submit travel claims to the employee's old official station for review and approval of the claim unless agency review and approval functions are performed elsewhere except as provided in § 302-11.405.
§ 302-11.405   Which agency must review and approve the employee's application when the employee transfers between agencies?
The hiring agency in the locality of the employee's old official station must review and approve the employee's application when the employee transfers between agencies, unless the hiring agency does not have an appropriate installation there. In that case, the losing agency at the old official station must review and approve the expenses.
§ 302-11.406   How must we administer an employee's claim?
To administer an employee's claim:
(a) You must:
(1) Review the employee's claim to determine whether the expenses claimed are reasonable in amount and customarily paid by the buyer/seller in the locality where the property is located;
(2) Disallow any portion of the employee's claim that is inflated or are higher than normal for similar services in the locality;
(3) Execute final administrative approval of payment of a claim by an appropriate agency approving official; and
(4) Return disapproved applications to the employee with a memorandum of explanation.
(b) The approving official must determine if:
(1) The aggregate amount of expenses claimed in connection with a sale or purchase of a residence is within the prescribed limitation for either;
(2) All conditions and requirements under which allowances may be paid have been met; and
(3) The expenses themselves are those which are reimbursable.
You must not pay the expenses listed in § 302-11.202 or § 302-11.304.
§ 302-11.407   What documentation must we require the employee to submit before paying residence transaction expenses?
Before paying residence transaction expenses, you must require the employee to submit:
(a) A copy of the employee's financial documents which prove that only the employee and or a member(s) of the immediate family made payments on the property;
(b) A copy of the employee's financial documents which prove that the employee and/or a member(s) of the immediate family received all proceeds from the sale of the property;
(c) Documentation that is acceptable by you in verifying any interest that the employee has in the property; and
(d) Any additional documents that you need to verify payments.
§ 302-11.420   How long can we authorize an extension for completion of the sale and purchase or lease termination transactions?
You may authorize an additional period of time, not to exceed 1 year, for completion of the sale and purchase or lease termination transactions.
§ 302-11.421   What must we consider when authorizing an extension of time limitation?
When authorizing an extension of time limitation, you must determine that the:
(a) Employee has extenuating circumstances which have prevented the employee from completing their sale and purchase or lease termination transactions in the initial authorized time frame of one year; and
(b) Employee's residence transactions are reasonably related to the employee's transfer of official station.
§ 302-11.430   When must we reimburse an employee for expenses incurred due to settlement of an unexpired lease?
You must reimburse an employee in lieu of residence transaction expenses when the employee meets the requirements of § 302-11.10 for expenses incurred due to settlement of an unexpired lease.
§ 302-11.431   How must we require an employee to request reimbursement for expenses of an unexpired lease settlement?
You must require that the employee submit an appropriate travel claim requesting reimbursement for expenses of an unexpired lease settlement with:
(a) An itemization of all expenses claimed supported by documentation showing that the employee indeed paid all lease settlement fees; and
(b) A total amount for all expenses claimed.
§ 302-11.440   How must we determine who holds title to property for reimbursement purposes?
To determine who holds title to property for reimbursement purposes, you must verify:
(a) Whose name(s) actually appears on the title document (e.g., the deed); or
(b) Who holds equitable title interest in the property.
§ 302-11.441   How must we determine if an employee holds equitable title interest in a property?
To determine if an employee holds equitable title interest in a property, you must follow the guidelines in § 302-11.405.
§ 302-11.450   May we advance an employee funds for expenses incurred in connection with residence transactions?
No, you may not advance an employee funds for expenses incurred in connection with residence transactions.
§ 302-11.451   What is the maximum amount that we may reimburse for the sale or purchase of an employee's residence?
The maximum amount that you may reimburse for the sale or purchase of an employee's residence is:
(a) Ten percent of the actual sale price for the sale of the employee's residence at the old official station; and
(b) Five percent of the actual purchase price of the residence for the purchase of a residence at the new official station.
§ 302-12.1   Who determines if I may use a RSC?
Your agency determines whether you may use a RSC and chooses which RSC you may use.
§ 302-12.2   Under what conditions may I participate in my agency's homesale program?
You may participate in your agency's homesale program, through its RSC contract, blanket purchase agreement, task order, or other formal arrangement (for the remainder of this part, all of these will be referred to as the contract with the RSC) provided you meet all of the following conditions:
(a) You are authorized to relocate;
(b) Your relocation includes at least one residence transaction;
(c) You have signed a relocation service agreement;
(d) Your agency authorizes you to use a RSC with which your agency has a contract;
(e) Your residence is within RSC contract scope for type, size, condition, and other contractual requirements;
(f) You meet all conditions established by this Chapter for the services that the RSC will provide to you; and
(g) You have signed an agreement with your agency to enter the agency's homesale program and to abide by all terms of the agency's contract with the RSC ( see § 302-12.4 for contract term examples).
§ 302-12.3   Am I required to participate in homesale counseling?
Yes, you are required to participate in homesale counseling if you are going to use the RSC. The RSC and/or your agency must provide counseling to help you understand the process, select a broker, prepare your home for sale, identify an appropriate selling price, set realistic expectations, etc. This counseling may be in person or via an electronic medium, at your agency's discretion. Your agency should also provide you with relocation information/counseling prior to you making any decisions to relocate.
§ 302-12.4   To what terms of the RSC contract am I required to agree?
Your agency determines the contract terms to which you will be required to agree. Examples of these contract terms may include, but are not limited to, the following:
(a) You will participate in counseling provided by the RSC;
(b) You will seriously consider any bona fide offer that you receive during the minimum marketing period;
(c) As a precondition of using its relocation services, you will complete and submit a disclosure form to the RSC to provide thorough information about the age and condition of your home and its systems.
§ 302-12.5   For what relocation services expenses will my agency pay?
Your agency will pay the relocation services company's fees/expenses for the services you are authorized to use. If your agency pays the relocation services company for actual expenses the company incurs on your behalf, payment to the company is limited to what you would have received under the direct reimbursement provisions of this chapter.
§ 302-12.6   If I use a contracted-for relocation service that is a substitute for reimbursable relocation allowance, will I be reimbursed for the relocation allowance as well?
No, if you use a contracted-for relocation service that is a substitute for reimbursable relocation allowance, you will not be reimbursed for the relocation as well.
§ 302-12.7   What expenses will my agency pay if I use a relocation services company to ship household goods in excess of the maximum weight allowance?
If you use a relocation services company to ship HHG in excess of the maximum weight allowance, your agency will pay the portion of the fee attributable to 18,000 pounds net weight. You must pay the rest.
§ 302-12.8   What expenses will my agency pay if I use a relocation services company to sell or purchase a residence for which I and/or a member(s) of my immediate family do not have full title?
If you use a relocation services company to sell or purchase a residence for which you and/or a member(s) of your immediate family do not have full title, your agency will pay the portion of the relocation services company's fee attributable to your pro rata share of the residence, in accordance with § 302-11.103 of this chapter. You must pay any portion of the fee attributable to other than your pro rata share of the residence.
§ 302-12.9   If my agency authorizes me to enter a homesale program, must I accept a buyout offer from the relocation services company?
No, if your agency authorizes you to enter a homesale program, your agency must give you the option to accept or reject an offer from the relocation services company.
§ 302-12.10   What are the income tax consequences if I use a relocation services company?
You may incur income taxes on relocation services provided by a relocation services company and paid for by your agency. Section 82 of the Internal Revenue Code states there shall be included in gross income (as compensation for services) any amount received or accrued, directly or indirectly, by an individual as a payment for or reimbursement of expenses of moving from one residence to another residence which is attributable to employment. You will receive a relocation income tax (RIT) allowance if your agency determines that such expenses are taxable. The Government does not assume responsibility for payment of your taxes, however, and you may wish to consult a tax professional on income tax reporting.
§ 302-12.100   What are “relocation services”?
“Relocation services” are services provided by a private company under a contract with an agency to assist an employee who relocates. Examples include homesale programs, home marketing assistance, home finding assistance, and property management services.
§ 302-12.101   May we enter into a contract with a relocation services company for the company to provide relocation services?
Yes, you may enter into a contract with a relocation services company for the company to provide relocation services.
§ 302-12.102   What contracted relocation services may we provide at Government expense?
You may pay for contracted relocation services that are substitutes for reimbursable relocation allowances authorized throughout this chapter. For example, you may pay for homesale services as a substitute for residence sale expenses, or household goods management services as a substitute for transportation of household goods.
§ 302-12.103   May we separately contract for each type of relocation service?
Yes, you may separately contract for each type of relocation service or you may combine several types of relocation services in a single contract.
§ 302-12.104   What is the purpose of contracting for relocation services?
The purpose of contracting for relocation services is to improve the treatment of employees who are directed to relocate to facilitate the retention of a well-qualified workforce.
§ 302-12.105   Must we have a contract with a RSC that includes a comprehensive homesale program?
No, you are not required to have a contract that includes a comprehensive homesale program (which, for this purpose, is defined as a relocation program that includes a contract with a RSC that provides for buyer value option sales, amended sales, and appraised value purchases by the RSC). However, if you do not have such a program, you must examine and evaluate the objectives and relative costs of your relocation benefits and management processes at least once every two years to determine whether a comprehensive homesale program should be part of your relocation program.
§ 302-12.106   What rules must we follow when contracting for a comprehensive homesale program?
You must follow the rules contained in the Federal Acquisition Regulations (FAR) (48 CFR) and/or all other acquisition regulations applicable to your agency.
§§ 302-12.107--302-12.108   [Reserved]
§ 302-12.109   May we require employees to participate in counseling before listing their homes?
Yes, you may require that employees participate in counseling before listing their homes, provided this is written into your agency's relocation policy. This is a common practice in the private sector. Please note, however, that this may exclude from your homesale program any employee who lists their home before the relocation travel authorization is approved. If you choose to make this part of your agency policy, you should make a major, ongoing effort to inform as many of your potential transferees as possible of this policy.
§ 302-12.110   [Reserved]
§ 302-12.111   May we require an employee to use a real estate broker specified by the RSC?
Yes, you may require, through your contract with the RSC, that every employee enrolled in the homesale program use a real estate broker specified by the RSC. This provision is not part of the standard terms for a homesale program, but it may provide a pricing advantage in negotiations with potential RSC, as well as an opportunity for better management of the homesale process.
§ 302-12.112   May we require an employee to use a mortgage service provider specified by the RSC?
No. Under the Real Estate Procedures Settlement Act (RESPA), you may not require that the employee obtain any mortgage from a lender specified by the RSC. The RSC may provide the employee access to multiple mortgage service providers as long as there is no use requirement, and the employee is provided a choice. Allowing the RSC to provide access to multiple providers is not part of the standard terms for a homesale program, but it may provide a pricing advantage in negotiations with potential RSCs, as well as an opportunity for better management of the homesale process.
§ 302-12.113   What must we do when planning, establishing, and administering a RSC contract?
(a) When planning and establishing a RSC contract, you must structure the contract so that it provides the best possible value to the Government, considering costs, tax implications, morale, mobility, employee choice, productivity, and any other relevant considerations. For most agencies and most relocations, this structure will include the possibility of a BVO sale or an amended value sale.
(b) Once you have a RSC contract, you must monitor costs and tax consequences and make adjustments as necessary, to ensure that your homesale program continues to provide the same best value to the Government.
§ 302-12.114   What policies must we establish when offering our employees the services of a RSC?
If you choose to offer the services of a RSC to your employees, you must establish policies governing:
(a) The conditions under which you will authorize an employee to use the contract with the RSC;
(b) Which employees you will allow to use the contract with the RSC;
(c) Which services the RSC will provide to the employee;
(d) Who will determine in each case if an employee may use the contract with the RSC and which services the RSC will provide;
(e) How you will monitor and evaluate the counseling provided by you and/or the RSC to your employees; and
(f) How you will monitor and maintain an appropriate balance between the three types of homesale transactions in your homesale programs (appraised value, buyer value option, and amended value).
§ 302-12.115   What are the income tax consequences that we must consider when offering relocation services?
Amounts you pay to a relocation services company on behalf of an employee may be taxable to the employee. In some cases, such as certain homesale programs, the amounts may not be taxable. You must determine the taxability of such payments, and pay a relocation income tax (RIT) allowance in accordance with part 302-17 of this chapter on payments you determine to be taxable to the employee. You may contact the: Assistant Chief Counsel (Income Tax & Accounting), Internal Revenue Service, 1111 Constitution Avenue, NW., Room 5501, Washington, DC 20224, for information on the income tax consequences of payments you make to a relocation services company.
§ 302-12.116   What must we consider in deciding whether to use the fixed-fee or cost-reimbursable contracting method?
You must consider the following factors in deciding whether to use the fixed-fee or cost-reimbursable contracting method:
(a) Risk of alternative methods. Under a fixed fee contract, the relocation services company bears all risks not expressly contained in the contract. Under a cost-reimbursable contract, you must assume some or all risks and, therefore, must assume some management responsibilities under the contract as well. For example, under a fixed fee homesale program you are not directly liable for losses incurred if a residence does not sell immediately, while under a cost-reimbursable homesale program you assume some or all risks of selling the residence.
(b) Cost of alternative methods. Under the fixed fee method of contracting, the fee includes a cost component for risks assumed by the relocation services company. Under the cost-reimbursable method of contracting, you are directly responsible for some or all of the costs associated with management of the contract. In deciding whether to use cost-reimbursable contracting you, therefore, must consider the cost of resources you would require (including personnel costs) to manage a cost-reimbursable relocation services contract.
(c) Effect on the obligation of funds. You must obligate funds for a relocation in the fiscal year in which the purchase order is awarded under the contract. Under the fixed fee contracting method, the amount of the relocation services fee is fixed and you have a basis for determining the amount of funds to obligate. Under the cost-reimbursable contracting method, you must obligate funds based on an estimate of the costs that will be incurred. When opting for cost-reimbursable contracting you, therefore, should establish a reliable method of computing fund obligation estimates.
§ 302-12.117   May we take title to an employee's residence?
No, you may not take title to an employee's residence except as specifically provided by statute. The statutes which form the basis for the provisions of this part do not provide such authority.
§ 302-12.118   Under a homesale program, may we establish a maximum home value above which we will not pay for homesale services?
Yes, if a home exceeding the maximum value above which you will not pay is sold under your homesale program, the employee will be responsible for any additional costs. You must establish a maximum amount commensurate with your agency's experience. You may consider, among other factors, budgetary constraints, the value range of homes in areas where you have offices, and the value range of homes previously entered in your program.
§ 302-12.119   Under a home sale program, may we pay an employee for losses the employee incurs on the sale of a residence?
No, under a home sale program, you may not pay an employee for losses the employee incurs on the sale of a residence, but this does not preclude you reimbursing a relocation services company for losses incurred while the contractor holds the property.
§ 302-12.120   Under a home sale program, may we direct the relocation services company to pay an employee more than the fair market value of the employee's residence?
No, under a home sale program, you may not direct the relocation services company to pay an employee more than the fair market value (as determined by the residence appraisal process) of the employee's home.
§ 302-12.121   May we use a relocation services contract for services which we are contractually bound to obtain under another travel services contract?
No, you may not use a relocation services contract to which you are contractually bound to obtain the services of another relocation service provider or to circumvent the travel and transportation expense payment system contract if you are a user of that contract.
§ 302-14.1   What is a “homesale program'?
A “homesale program” is a program offered by an agency through a contractual arrangement with a relocation services company. The relocation services company purchases a transferred employee's residence at fair market (appraised) value and then independently markets and sells the residence.
§ 302-14.2   What is the purpose of a home marketing incentive payment?
The purpose of a home marketing incentive payment is to reduce the Government's relocation costs by encouraging transferred employees to participate in their employing agency's homesale program to independently and aggressively market, and find a bona fide buyer for their residence. This significantly reduces the fees/expenses their agencies must pay to relocation services companies and effectively lowers the cost of such programs.
§ 302-14.3   Am I eligible to receive a home marketing incentive payment?
Yes, you are eligible to receive a home marketing incentive payment if you are an employee who is authorized to transfer and you otherwise meet requirements for sale of your residence at Government expense.
§ 302-14.4   Must my agency pay me a home marketing incentive?
No, your agency determines when it is in the Government's interest to offer you a home marketing incentive.
§ 302-14.5   Under what circumstances will I receive a home marketing incentive payment?
You will receive a home marketing incentive payment when:
(a) You enter your residence in your agency's homesale program;
(b) You independently and aggressively market your residence;
(c) You find a bona fide buyer for your residence as a result of your independent marketing efforts;
(d) You transfer the residence to the relocation services company;
(e) Your agency pays a reduced fee/expenses to the relocation services company as a result of your independent marketing efforts;
(f) You meet any additional conditions your agency has established, including but not limited to, mandatory marketing periods, list price guidelines, closing requirements, and residence value caps; and
(g) Your agency has established a home marketing incentive program.
§ 302-14.6   How much may my agency pay me for a home marketing incentive?
Your agency will determine the amount of your home marketing incentive payment. The incentive payment, however, may not exceed the lesser of:
(a) Five percent of the price the relocation services company paid when it purchased the residence from you; or
(b) The savings your agency realized from the reduced fee/expenses it paid as a result of you finding a bona fide buyer.
§ 302-14.7   Are there tax consequences when I receive a home marketing incentive payment?
Yes, the home marketing incentive payment is considered income. Consequently, you will be taxed, and your agency will withhold income and employment taxes, on the home marketing incentive payment. You will not, however, receive a withholding tax allowance (WTA) to offset the withholding on your home marketing incentive payment, nor will you receive a relocation income tax (RIT) allowance payment for substantially all of your Federal, state and local income taxes on the incentive payment.
§ 302-14.100   How should we administer our home marketing incentive payment program?
Your goal in using an incentive payment program is to reduce your overall relocation costs. You must not make a home marketing incentive payment that exceeds the savings you realize from the reduced fees/expenses you pay the relocation services company.
§ 302-14.101   What policies must we establish to govern our home marketing incentive payment program?
You must establish policies to govern:
(a) The conditions under which you will authorize a home marketing incentive payment for an employee;
(b) The amount of the home marketing incentive payment(s) you will offer (or) the method you will use to compute your home marketing incentive payments); and
(c) Who will determine in each case whether a home marketing incentive payment is authorized.
§ 302-14.102   What factors should we consider in determining whether to establish a home marketing incentive payment program?
In determining whether to establish a home marketing incentive payment program, you should consider:
(a) Whether the program will increase the percentage of residences sold for which employees find a bona fide buyer. You should establish a benchmark for the percentage of residences for which you expect employees to find a bona fide buyer resulting in lower homesale costs to you. If your historical percentage of employee-generated sales is below your benchmark, a home marketing incentive payment program may benefit you; and
(b) The expected net savings from a home marketing incentive payment program.
§ 302-14.103   What factors should we consider in determining the amount of a home marketing incentive payment?
In determining the amount of a home marketing incentive payment, you should consider the:
(a) Amount of savings from reduced fee/expenses paid to the relocation services company. The home marketing incentive payment program is intended to reduce your relocation costs. The amount of each home marketing incentive payment you make, therefore, must not exceed the savings you realize from the reduced fee you pay to the relocation services company; and
(b) Employee's efforts in marketing the residence. The purpose of a home marketing incentive payment program is to encourage a transferred employee who participates in a homesale program to independently and aggressively market the employee's residence and find a bona fide buyer.
§ 302-15.1   What are property management services?
“Property management services” are programs provided by private companies for a fee, which help an employee to manage the employee's residence at the old official station as a rental property. These services typically include, but are not limited to, obtaining a tenant, negotiating the lease, inspecting the property regularly, managing repairs and maintenance, enforcing lease terms, collecting the rent, paying the mortgage and other carrying expenses from rental proceeds and/or funds of the employee, and accounting for the transactions and providing periodic reports to the employee.
§ 302-15.2   What are the purposes of the property management services allowance?
The purposes of the property management services allowance are to:
(a) Reduce overall Government relocation costs by using the property management services allowance in place of allowances for the sale of the employee's residence; and
(b) Relieve employees transferred to OCONUS duty stations from the costs of maintaining a home in CONUS during their tour of duty.
§ 302-15.3   Am I eligible for payment for property management services under this part?
Yes, you are eligible for payment for property management services when:
(a) You transfer in the interest of the Government; and
(b) You and/or a member(s) of your immediate family hold(s) title to a residence which you are eligible to sell at Government expense under part 302-11 or part 302-12 of this chapter.
§ 302-15.4   Who is not eligible for payment for property management services?
New appointees, employees assigned under the Government Employees Training Act (5 U.S.C. 4109), and employees transferring wholly outside the United States are not eligible for payment for property management services. However, relocations wholly outside the United States do not affect previously authorized property management services as long as the employee continues to meet the requirements of § 302-15.6 and any other conditions established by the agency.
§ 302-15.5   Is my agency required to authorize payment for property management services?
No, your agency is not required to authorize payment for property management services. However, your agency determines:
(a) When you meet the conditions set forth in § 302-15.3;
(b) When to authorize payment for these services; and
(c) What procedures you must follow when it authorizes such payment.
§ 302-15.6   Under what circumstances may my agency authorize payment under this part?
(a) For a relocation to an official station in the United States, your agency may authorize payment under this part when:
(1) You are being returned from a foreign area post of duty to a different official station than the one from which you were transferred for your foreign tour of duty;
(2) Your agency has determined that property management services is more advantageous and cost effective for the Government than having to sell your residence;
(3) You have signed a service agreements; and
(4) You meet any additional conditions that your agency has established.
(b) For relocations to official stations outside the United States, your agency will authorize payment under this part when you meet conditions set forth in paragraphs (a)(3) and (4) of this section.
§ 302-15.7   For what property may my agency authorize payment under this part?
Under this part, payment may be authorized only for your residence at the last official station in the United States from which you transferred.
§ 302-15.8   When my agency authorizes payment for me under this part, am I obligated to use such services, or may I elect instead to sell my residence at Government expense?
You are not obligated to use your authorized property management services allowance. You have the option of choosing to sell your residence at Government expense or to use the property management services allowance.
§ 302-15.9   Must I repay property management expenses my agency paid under this part if I elect to sell my former residence in the United States at Government expense when I am transferred from my current foreign post of duty to an official station in the United States other than the one I left?
No, you are not required to repay any property management expenses paid by your agency if you elect to sell your former residence in the United States when transferred from your post of duty to an official station in the United States. The authority for your agency to pay for property management services under this part when you are transferred to a foreign post of duty arises from your transfer to the foreign post of duty. It is separate from, and in addition to, the authority to sell your residence at Government expense when you are transferred to an official station in the United States other than the official station from which you were transferred to the foreign post of duty.
§ 302-15.10   How long may my agency pay for property management services under this part?
The length of time your agency may pay for property management services under this part depends on the type of transfer.
(a) If you transfer within the United States, your agency may pay for a period not to exceed one year from your effective date of transfer, with up to a 1-year extension, under the same conditions required in § 302-11.21 of this chapter.
(b) If you transfer to a foreign area post of duty, including successive foreign area tours of duty for which you signed a new service agreement (see § 302-15.4), your agency may pay from your effective date of transfer until you return to the last official station in the United States from which you transferred.
(c) If you transfer from a foreign area post of duty, including successive foreign area tours of duty for which you signed a new service agreement (see § 302-15.4), to a different official station in the United States than the one from which you were transferred from for your foreign area tour of duty (see § 302-15.6), your agency may pay for a period not to exceed one year from your effective date of transfer to the US, with up to a 1-year extension, under the same conditions required in § 302-11.21 of this chapter.
(d) If you transfer to a foreign area post of duty, complete your service agreement, and remain there without signing a new service agreement, your agency may pay from the effective date of your transfer to when your service agreement is completed.
(e) If you transfer to a foreign area post of duty and separate from Government service before completing your service agreement, your agency may pay from the effective date of your transfer to the date of your separation.
(f) If you transfer within the United States or from a foreign area post of duty to a different official station in the United States than the one from which you were transferred for your foreign area tour of duty, and you separate from Government service before the time periods stated in paragraphs (a) and (c) of this section, your agency may pay from the effective date of your transfer to the date of your separation.
§ 302-15.11   If my agency authorized, and I elected to receive, payment for property management expenses, may I later elect to sell my residence at Government expense?
Yes, you may change your selection from receiving property management expenses to selling your residence at Government expense provided:
(a) Your agency allows you to change your election of payment from property management expenses to the sale of your residence at Government expense; and
(b) Payment for sale of your residence at Government expense is offset in accordance with your agency's policy established under § 302-15.70(d).
§ 302-15.12   If my agency is paying for property management services under this part and my service agreement expires, what must I do to ensure that payment for property management services continues?
You must sign a new service agreement (see § 302-2.14 of this chapter) to continue to this benefit.
§ 302-15.13   What are the income tax consequences when my agency pays for my property management services?
When your agency pays for your property management services, you will be taxed on the amount of expenses your agency pays for property management services whether it reimburses you directly or whether it pays a relocation services company to manage your residence. Your agency must pay you a relocation income tax (RIT) allowance for the additional Federal, State and local income taxes you incur on property management expenses it reimburses you or pays on your behalf.
You may wish to consult with a tax advisor to determine whether you will incur any additional tax liability, unrelated to your agency's payment of your property management expenses, as a result of maintaining your residence as a rental property.
§ 302-15.70   What governing policies must we establish for the allowance for property management services?
You must establish policies and procedures governing:
(a) When you will authorize payment for property management services for an employee who transfers in the interest of the Government;
(b) When it is appropriate to authorize this service on a reimbursable basis to the employee, rather than paying the property management company directly, as long as any reimbursement is equal to or less than the agency negotiated rate for this service (agencies may require that employees hire only licensed and/or certified property managers).
(c) Who will determine, for relocations to official duty stations in the United States, whether payment for property management services is more advantageous and cost effective than sale of an employee's residence at Government expense;
(d) If and when you will allow an employee who was offered and accepted payment for property management services to change the employee's residence at Government expense in accordance with paragraph (e) of this section; and
(e) How you will offset expenses you have paid for property management services against payable expenses for sale of the employee's residence when an eligible employee who elected payment for property management services later changes their mind and elects instead to sell their residence at Government expense.
§ 302-16.0   In general.
(a) Use of pronouns “I”, “you”, and their variants throughout subpart A of this part refers to the employee, unless otherwise noted.
(b) Use of pronouns “we”, “you”, and their variants throughout subpart B of this part refers to the agency.
§ 302-16.1   What is the purpose of the miscellaneous expenses allowance (MEA)?
The miscellaneous expenses allowance (MEA) is intended to help defray various costs incurred due to relocation, assignment to a temporary official station (TCS), and return to the previous official station upon completion of a TCS assignment.
§ 302-16.2   Who is and who is not eligible for a MEA?
(a) You are eligible for a MEA if:
(1) Your agency authorized or approved a transfer or a TCS;
(2) You discontinued and established a residence in connection with your transfer or TCS;
(3) You meet the applicable eligibility conditions in part 302-1 of this chapter; and
(4) You signed a required service agreement in part 302-2 of this chapter, if transferred.
(b) You are not eligible for a MEA if you are:
(1) A new appointee;
(2) A Senior Executive Service (SES) employee authorized “last move home” benefits upon separation from Government service;
(3) Assigned under the Government Employees Training Act (5 U.S.C. 4109);
(4) Returning from an Outside the Continental United States (OCONUS) official station to place of actual residence for separation from Government service; or
(5) Returning from an OCONUS official station to a new CONUS official station if relocation expenses have not been authorized to the new CONUS official station.
§ 302-16.3   Must my agency authorize payment of a MEA?
Yes, if you meet the applicable eligibility conditions in § 302-16.2, your agency must authorize payment of a MEA.
§ 302-16.4   How will I receive the MEA?
You will be reimbursed your MEA in accordance with your agency's internal relocation policy.
§ 302-16.5   May I receive an advance of funds for MEA?
No, your agency may not authorize an advance of funds for MEA. MEA may be paid after you have transferred to the new official station, upon assignment to your TCS, or upon completion of your TCS and return to your previous official station, as applicable.
§ 302-16.6   What amount may my agency reimburse me for miscellaneous expenses?
The following amounts will be paid for miscellaneous expenses without support or documentation of expenses:
(a) Either a lump sum amount set in a Federal Travel Regulation (FTR) bulletin or the equivalent of one week's basic gross pay, whichever is the lesser amount, if you have no immediate family relocating with you; or
(b) Either a lump sum amount set in an FTR bulletin or the equivalent of two weeks' basic gross pay, whichever is the lesser amount, if you have immediate family relocating with you.
GSA publishes the lump sum amounts in an FTR bulletin on an intermittent basis at https://gsa.gov/ftrbulletins.
§ 302-16.7   May I claim an amount in excess of that prescribed in this part?
Yes, you may claim an amount in excess of that prescribed in § 302-16.6 if authorized by your agency; and
(a) Supported by acceptable statements of fact, paid bills or other acceptable evidence (documentation) justifying the amounts claimed; and
(b) The aggregate amount does not exceed your basic gross pay (at the time you reported for duty, at your new official station) for:
(1) One week if you are relocating without immediate family; or
(2) Two weeks if you are relocating with immediate family.
(c) The amount authorized cannot exceed the maximum rate of grade GS-13, Step 10 General Schedule (base) salary (excluding locality pay) (see 5 U.S.C. 5332) at the time you reported for duty at your new official station.
§ 302-16.8   What are examples of types of costs covered by the MEA?
Miscellaneous expenses are costs associated with relocating that are not covered by other relocation benefits detailed in this chapter. Expenses allowable include but are not limited to the following, and similar, items:
(a) Fees for disconnecting and connecting utilities (such as gas, water, electricity), appliances, equipment (such as a security system or electric vehicle charging station), or conversion of appliances for operation on available utilities;
(b) Fees for cutting and fitting rugs, draperies, and curtains when they are moved from one residence to another;
(c) Deposits or fees for utilities not offset by eventual refunds;
(d) Losses that cannot be recovered by transfer or refund and are incurred due to early termination of a contract ( e.g., medical, dental, private institutional care for immediate family members with disabilities, nonrefundable education enrollment fee, real estate expenses connected with the cancellation of a contract when a new transfer prevented the employee from completing a purchase of a residence);
(e) Automobile registration, driver's license, and use taxes imposed when initially bringing privately-owned vehicles (POVs) into certain jurisdictions;
(f) Reinstalling or removing automobile parts upon vehicle reentry into the United States or entry into a foreign country, when removal or installation of those automobile parts was required by host country law;
(g) Post office box rental fee when rented to provide a constant mailing address between the time an employee departs the old residence and occupies a residence at the new official station;
(h) Rental agent fees customarily charged for securing housing in foreign countries;
(i) Reassembly, set up, and tuning of a piano moved for relocation;
(j) Pet care (for cats and dogs only), child care, or adult care for dependent parents or other adult dependents incapable of self-care at home while the employee or spouse are away on a househunting trip, or are packing or unpacking;
(k) Rental car fees while awaiting a delayed POV shipment to or from OCONUS if the transportation service provider (TSP) has not arranged for the employee's use of a rental car at TSP expense. Reimbursement may be authorized starting after the shipping company designated delivery date, shall not exceed 10 days, and does not include the days after the POV is delivered or a new POV is purchased at location. The rental car for the employee and immediate family members must be the same or comparable size or model as the POV the employee shipped;
(l) Transportation and quarantine of pets (cats and dogs only). Costs normally associated with the transportation, quarantine fees, and handling of dogs and cats. This includes pet-related costs due to air carrier rules or imposed by the law of the jurisdiction of the employee's new residence as an integral part of the process of admissions and licensing;
(m) Professional relicensing fees required by the new official station that are directly related to the employee's occupation, such as fees required to take the bar exam or teaching certification; and professional relicensing fees or business costs (including exam, continuing education courses, business license, permit, and registration fees) that are directly related to the immediate family member's occupation, when the immediate family member was licensed or certified in a profession, or owned a business, at the employee's previous official station and is required to secure or maintain a new professional license or certification, or business license or permit, to engage in that profession in a new jurisdiction because of unique licensing or certification requirements and authorities; or
(n) Specialized shipment of hazardous materials, such as lithium batteries, when Federal, state, local, and foreign country laws or carrier regulations prohibit commercial shipment of certain articles not included as part of household goods, which cannot be otherwise transported to the new official station because of shipping and transportation restrictions.
§ 302-16.9   What are examples of types of costs not covered by the MEA?
Examples of costs that are not reimbursable from the MEA are:
(a) Losses in selling or buying real and personal property and costs related to such transactions;
(b) Cost of additional insurance on household goods while in transit to the new official station or cost of loss or damage to such property;
(c) Additional costs of moving household goods caused by exceeding the maximum weight limitation;
(d) Costs of newly acquired items, such as the purchase or installation cost of new rugs or draperies;
(e) Higher income, real estate, sales, or other taxes as the result of establishing residence in the new locality;
(f) Fines imposed for traffic infractions while en route to the new official station locality;
(g) Accident insurance premiums or liability costs incurred in connection with travel to the new official station locality, or any other liability imposed upon the employee for uninsured damages caused by accidents for which the employee or their immediate family is held responsible;
(h) Losses as the result of sale or disposal of items of personal property (such as lithium batteries, gasoline, and natural gas) not considered convenient or practicable to move;
(i) Damage or loss of clothing, luggage, or other personal effects while traveling to the new official station locality;
(j) Subsistence, transportation, or mileage expenses in excess of the amounts reimbursed as per diem or other allowances under this subtitle;
(k) Medical expenses due to illness or injuries while en route to the new official station or while living in temporary quarters at Government expense under the provisions of this chapter;
(l) Costs incurred in conjunction with structural alterations (such as remodeling or modernizing of living quarters, garages or other buildings to accommodate privately-owned automobiles, appliances or equipment [ e.g., a security system or electric vehicle charging station]); or replacing or repairing worn-out or defective appliances, or equipment shipped to the new location;
(m) Costs incurred in connection with preparing a residence for sale or purchase ( e.g., maintenance, repairs, cleaning);
(n) Delivery charges or costs associated with newly-acquired items (such as appliances, security systems, locksmith service, or new vehicle) at the new official station for reasons of personal taste or preference and not required because of the relocation;
(o) Costs unrelated to the quarantine, transportation, and handling of pets. Additional costs for lodging for a second room or boarding fees, micro-chipping, veterinary expenses ( e.g., inoculations, examinations, medical care and certification fees), routine care and grooming of pets, and purchases of crates and tags for the pets. Expenses for other animals (horses, fish, birds, reptiles, rodents, etc.) are not authorized because of their size, exotic nature, restrictions on shipping, host country restrictions, and special handling difficulties; or
(p) Costs related to obtaining a visa, passport, immigration green card, birth certificate or other acceptable evidence of birth when required for official travel to foreign locations; charges for immunization, inoculations, other disease-preventative medical prophylaxis, including disease testing, that are required for official travel if not obtained through the agency. The expenses in this paragraph (p) may be reimbursable as part of the employee's relocation en route travel miscellaneous expenses as specified in 41 CFR 301-12.1.
§ 302-16.10   What standard of care must I use in incurring miscellaneous expenses?
You must exercise the same care in incurring expenses that a prudent person would exercise if relocating at personal expense.
§ 302-16.100   What governing policies must we establish for MEA?
For MEAs, you must establish policies and procedures governing:
(a) Who will determine whether payment for an amount in excess of the lump sum MEA is appropriate; and
(b) How you will pay a MEA in accordance with §§ 302-16.2 and 302-16.3.
§ 302-16.101   How should we administer the authorization and payment of miscellaneous expenses?
You should limit payment of miscellaneous expenses to only those expenses that are necessary.
§ 302-16.102   Are there any restrictions to the types of costs we may cover?
Yes, a MEA cannot be used to reimburse:
(a) Costs or expenses incurred which exceed maximums provided by statute or in this subtitle;
(b) Costs or expenses incurred but which are disallowed elsewhere in this subtitle;
(c) Costs reimbursed under other provisions of law or regulations;
(d) Costs or expenses incurred for reasons of personal taste or preference and not required because of the move;
(e) Losses covered by insurance;
(f) Fines or other penalties imposed upon the employee or members of their immediate family;
(g) Judgments, court costs, and similar expenses growing out of civil actions; or
(h) Any other expenses brought about by circumstances, factors, or actions in which the move to a new official station was not the proximate cause.
§ 302-17.0   General.
Use of the pronouns “I,” “you,” and their variants throughout this part refer to the employee, unless otherwise noted.
§ 302-17.1   What special terms apply to this part?
The following definitions apply to this part:
Allowance means :
(1) Money paid to the employee to cover future expenses, such as the miscellaneous expense allowance (see part 302-16 of this chapter for information about the miscellaneous expense allowance );
(2) Money paid to the employee to cover past expenses, such as the relocation income tax allowance (RITA) under the two-year tax process described in part 302-17, subpart G; or
(3) A limit established by statute or regulation, such as the 18,000 pound net weight allowance for household goods shipments (see part 302-7 of this chapter for information about the 18,000 pound net weight allowance ).
City means any unit of general local government as defined in 31 CFR 215.2(b).
Combined marginal tax rate (CMTR) means a single rate determined by combining the applicable marginal tax rates for Federal, state, and local income taxes, using the formula provided in § 302-17.40. (If you incur liability for income tax in the Commonwealth of Puerto Rico, see § 302-17.44.)
County means any unit of local general government as defined in 31 CFR 215.2(e).
Gross-up used as a noun in this part means:
(1) The process that your agency uses to estimate the additional income tax liability that you incur as a result of relocation benefits and taxes on those benefits; or
(2) The result of the gross-up process.
The gross-up allows for the fact that every reimbursement of taxes is itself taxable. Therefore, the gross-up calculates the amount an agency must reimburse an employee to cover substantially all of the income taxes incurred as the result of a relocation.
Internal Revenue Code (IRC) means Title 26 of the United States Code, which governs Federal income taxes.
Local income tax means a tax imposed by a recognized city or county tax authority that is deductible for Federal income tax purposes as a local income tax under the IRC, at 26 U.S.C. 164(a)(3). (See the definitions for the terms city and county in this section.)
Marginal tax rate (MTR) means the tax rate that applies to the last increment of taxable income after taxable relocation benefits have been added to the employee's income. Examples of how to determine the marginal tax rate using the IRS Tax Rate Schedules are published in an FTR bulletin at https://gsa.gov/ftrbulletins .
Reimbursement means money paid to you to cover expenses that you have already paid for out of your own funds.
Relocation benefits means all reimbursements and allowances that you receive, plus all direct payments that your agency makes on your behalf, in connection with your relocation.
Relocation income tax allowance (RITA) means the payment to individuals to cover the difference between the withholding tax allowance (WTA), if any, and the actual income tax liability incurred by the individual, and such individual's spouse (if filing jointly), as a result of their taxable relocation benefits authorized pursuant to this chapter. RITA is paid whenever the actual income tax liability exceeds the WTA and applies to any travel, transportation, and relocation expenses reimbursed or furnished in kind pursuant to chapter 57, subchapter II of title 5 U.S.C. and 5 U.S.C. chapter 41.
State means any one of the several states of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, or any other territory or possession of the United States.
State income tax means a tax imposed by a state tax authority that is deductible for Federal income tax purposes under the IRC, specifically 26 U.S.C. 164(a)(3).
Withholding tax allowance (WTA) means the amount paid to the Federal IRS by the agency as withholding of income taxes for any taxable relocation allowance, reimbursement, or direct payment to a vendor.
§ 302-17.2   Why does relocation affect personal income taxes?
When you are relocated from one permanent duty station to another, you are reimbursed by your employing agency for certain expenses. The IRC requires that you report many of these relocation benefits, including some that your agency pays on your behalf, as taxable income. When you receive taxable benefits, you must pay income tax on the amount or value of those benefits. However, 5 U.S.C. 5724b also requires that your agency reimburse you for substantially all of the additional Federal, state, and local income taxes you incur as a result of any taxable relocation benefits. A reimbursement for taxes is also a taxable benefit on which you must pay additional taxes.
§ 302-17.3   What is the Government's objective in reimbursing the additional income taxes incurred as a result of a relocation?
The Government's objective is to reimburse employees or individuals eligible for relocation expense allowances under § 302-1.1 of this chapter for substantially all (not exactly all—see § 302-17.4) of the additional Federal, state, and local income taxes incurred as a result of a relocation, including the taxes on the taxable relocation benefits and the taxes on the reimbursement for taxes.
§ 302-17.4   Why is the reimbursement for substantially all, and not exactly all, of the additional income taxes incurred as a result of a relocation?
Because of the complexity of the calculations, which involve not only Federal income tax but also the income tax rates of many states and localities, it is not reasonable for the Government to compute the exact impact of relocation on an affected employee's taxes. Making a good faith effort to reimburse substantially all additional income taxes is sufficient. The statute where this appears, at 5 U.S.C. 5724b does not define substantially all. This Part provides the description through its provisions.
§ 302-17.5   Who is eligible for the WTA and the RITA?
The withholding tax allowance (WTA) and the relocation income tax allowance (RITA) are the two allowances through which the Government reimburses you for substantially all of the income taxes that you incur as a result of your relocation. You are eligible for the WTA and the RITA if you are relocating in the interest of the Government, and your agency's reimbursements to you for relocation expenses result in you being liable for additional income taxes. Eligibility for WTA and RITA includes, among others, transferred employees, appointments (new or political), assignments under the Government Employees Training Act, and those returning from an overseas assignment for the purpose of separation from Government service.
If your agency offers you the choice, the WTA is optional to you. See 302-17.61 through 302-17.69.
§ 302-17.6   Is there any circumstance under which the WTA and the RITA are not paid even though I would otherwise be eligible?
If you violate the 12-month service agreement under which you are relocated, your agency will not pay the WTA or the RITA to you, and you must repay any relocation benefits paid prior to the violation.
§ 302-17.7   What limitations and Federal income tax treatments apply to various relocation reimbursements?
(a) Some relocation expenses reimbursed to you or paid directly by the Government on or after January 1, 2018, and on or before December 31, 2025, must be reported as income and you cannot claim them as deductible expenses on your Federal tax return.
(b) A table summarizing the FTR allowances, limitations, and tax treatment of each reimbursement, allowance, or direct payment to a service provider or vendor is published at https://gsa.gov/ftrbulletins. The table also cites relevant FTR paragraphs for details. GSA will revise the table to reflect any changes as quickly as possible; however, users of this part may wish to consult with a tax advisor to determine what limitations and Federal income tax treatments apply to your relocation reimbursement(s).
§ 302-17.8   Who is responsible for knowing which relocation expenses are taxable and which expenses are nontaxable?
Both you and your agency must know which reimbursements and direct payments to vendors are taxable and which are nontaxable in your specific circumstances. When you submit a voucher for reimbursement, your agency must determine whether the reimbursement is taxable income at the Federal, state, and/or local level. Then, when you file your income tax returns, you must report the taxable allowances, reimbursements, and direct payments to vendors as income. Your agency is ultimately responsible for calculating and reporting withholding accurately and you are ultimately responsible for filing your taxes correctly.
§ 302-17.9   Which expenses should I report on my state tax returns if I am required to file returns in two different states?
In most cases, your state tax return for the state you are leaving should reflect your reimbursement or allowance, if any, for househunting expenses and your reimbursement or direct payments to vendors for real estate expenses at the home you are leaving. All other taxable expenses should be shown as income on the tax return you file in the state into which you have moved. However, you and your agency must carefully study the rules in both states and include everything that each state considers to be income on each of your state tax returns.
§ 302-17.10   When is an expense considered completed in a specific tax year?
A reimbursement, allowance, or direct payment to a vendor is considered completed in a specific tax year only if the money was actually disbursed to the employee or vendor during the tax year in question.
§ 302-17.11   Where can I find additional information and guidance on WTA and RITA?
GSA has published additional information on WTA and RITA, including the illustrations and examples of various RITA computations, in FTR Bulletins which are updated as necessary. GSA FTR Bulletins may be found at https://gsa.gov/ftrbulletins .
§ 302-17.12   How are taxes on extended TDY benefits and taxes on relocation allowances related?
(a) Taxes on extended TDY benefits are computed using exactly the same processes described in this Part for the WTA and RITA except that:
(1) The tax process for extended TDY benefits uses the term “withholding tax allowance” (WTA) in exactly the same fashion as the process for taxes on relocation allowances; however, in place of the term “relocation income tax allowance,” the tax process for extended TDY benefits uses the term “extended TDY tax reimbursement allowance” (ETTRA); and
(2) All benefits are taxable under extended TDY, so the sections of this Part that discuss which benefits are taxable and which are not have no relevance to ETTRA.
(b) See part 301-11, subpart F of this title for additional information about taxes on extended TDY benefits.
§ 302-17.20   What is the purpose of the WTA?
The purpose of the WTA is to protect you from having to use part of your relocation expense reimbursements to pay Federal income tax withholding; it does not cover state taxes, local taxes, Medicare taxes, or Social Security taxes (see § 302-17.22(c) and (d)).
If your agency offers you the choice, the WTA is optional to you. See §§ 302-17.61 through 302-17.69.
§ 302-17.21   What relocation expenses does the WTA cover?
The WTA covers certain allowances, reimbursements, and/or direct payments to vendors, to the extent that each of them is taxable income. In particular, the WTA covers:
(a) En route lodging, meals and incidental expenses—Reimbursements for lodging, meals and incidental expenses while en route to the new official station for you and your immediate family member(s). (See part 302-4 of this chapter).
(b) Transportation—Transportation expenses, to include commercial air or privately owned vehicle, for you and your immediate family member(s) transferred between official stations. (See part 302-4 of this chapter).
(c) Househunting trip—Travel (including per diem and transportation) expenses for you and/or your spouse for a round trip to the new official station to seek permanent residence quarters. Househunting is covered regardless of whether reimbursed under the per diem allowance or lump sum method. (See part 302-5 of this chapter).
(d) Temporary quarters—Subsistence expenses for you and your immediate family during occupancy of temporary quarters at the old or new official station. Temporary quarters are covered regardless of whether reimbursed under the lodgings-plus, actual expense, or lump sum method. (See part 302-6 of this chapter).
(e) Transportation and temporary storage of personal property—Transportation and temporary storage of household goods (HHG) and at Government expense for employees who transferred between official stations. (See part 302-7 of this chapter).
(f) Extended storage—Extended storage of household goods for a temporary change of station in CONUS or assignment to an isolated duty station in CONUS. (See part 302-8 of this chapter).
(g) Transportation of privately owned vehicle—Transportation of a privately owned vehicle at Government expense for employees who transferred between official stations in CONUS. (See part 302-9 of this chapter).
(h) Transportation of mobile homes and boats used as a primary residence—Expenses for transportation of a mobile home or boat in lieu of transportation of household goods to the new official station. (See part 302-10 of this chapter).
(i) Real estate—Expenses for the sale of the residence at your old official station and/or purchase of a home at your new official station, when reimbursement is made directly to you. This can also include expenses for settling an unexpired lease (“breaking” a lease) at your old official station. (See part 302-11 of this chapter. If you or a member of your immediate family do not hold full title to the home you are selling or buying, see § 302-11.103 of this chapter).
(j) Relocation services company—Expenses paid by a relocation services company to the extent such payments constitute taxable income to the employee. The extent to which such payments constitute taxable income varies according to the individual circumstances of your relocation, and by the state and locality in which you reside. (See appropriate state and local tax authorities for additional information). (See also part 302-12 of this chapter).
(k) Property Management Services—Payment for the services of a property manager for renting rather than selling a residence at your old official station. (See part 302-15 of this chapter).
(l) Miscellaneous expense allowance—Miscellaneous expenses for defraying certain relocation expenses not covered by other relocation benefits. (See part 302-16 of this chapter).
§ 302-17.22   What relocation expenses does the WTA not cover?
The WTA does not cover the following relocation expenses:
(a) Any reimbursement, allowance, or direct payment to a vendor that should not be reported as taxable income when you file your Federal tax return; this includes but is not limited to expenses for transportation of POVs for OCONUS assignments.
(b) Reimbursed expenses for extended storage of household goods during an OCONUS assignment, if reimbursement is permitted under your agency's policy.
(c) State and local withholding tax obligations. To the extent that your state or local tax authority requires periodic (such as quarterly) tax payments, you are responsible to pay these from your own funds. Your agency reimburses you for substantially all of these payments through the RITA process, but your agency does not provide a WTA for them. If required to by state or local law, your agency may withhold these from your reimbursement.
(d) Additional taxes due under the Federal Insurance Contributions Act including Social Security tax, if applicable, and Medicare tax. Current law does not allow Federal agencies to reimburse transferees for these employment taxes on relocation benefits. However, your agency will deduct for these taxes from your reimbursements for taxable items.
(e) Home marketing incentive payment. In accordance with FTR part 302-14, your agency may not provide you either a WTA or RITA for this incentive.
(f) Any recruitment, relocation, or retention incentive payment that you receive. Any withholding of taxes for such payments is outside the scope of this regulation. Rather, it is covered by regulations issued by the Office of Personnel Management, Treasury's Financial Management Service, and the IRS.
(g) Any allowances, reimbursements, and/or direct payments to vendors not related to your relocation; for example, a reimbursement for office supplies would not be covered by the WTA, even if it occurred during your relocation.
§ 302-17.23   What are the procedures for my WTA?
(a) Your agency prepares a relocation travel authorization, which includes an estimate of the WTA and RITA, to obligate funds for your relocation.
(b) Your agency pays certain allowances to you. Your agency also pays vendors directly for other relocation expenses.
(c) Your agency instructs you as to whether to submit one voucher after you have completed your relocation or to submit vouchers at various points as your relocation progresses plus another when your relocation is completed.
(d) You submit your voucher(s) for reimbursement of certain relocation expenses.
(e) Your agency determines the extent to which each allowance, each item on your voucher(s), and each direct payment to a vendor is nontaxable or is taxable income to you under the IRC.
(f) For the taxable items, your agency calculates your WTA and any reimbursement(s) due to you in accordance with § 302-17.24. Your agency sets aside the amount of your WTA and pays the IRS as a withholding tax in accordance with IRS requirements.
§ 302-17.24   How does my agency compute my WTA?
Each time your agency pays a covered, taxable relocation expense, regardless of whether it is a reimbursement, allowance, or direct payment to a vendor, it is considered “supplemental wages” as defined in 26 CFR 31.3402(g)-1(a) (see also IRS Publication 15, Employer's Tax Guide). You owe taxes on the WTA itself because, like most other relocation allowances, it is taxable income. To reimburse you for the taxes on the WTA itself, your agency computes the WTA by using the grossed-up withholding formula below and the appropriate supplemental wage rate, as specified in IRS Publication 15. This rate, along with examples of how to calculate the WTA, is published in an FTR bulletin available at https://gsa.gov/ftrbulletins . The formula for calculating the WTA is:
Where R is the withholding rate for supplemental wages.
Your agency must deduct withholding for FICA (Medicare and Social Security), as the WTA does not cover such expenses.
§ 302-17.30   What is the purpose of the RITA?
(a) The purpose of the RITA is to reimburse you for any taxes that you owe that were not adequately reimbursed by the WTA. As discussed in § 302-17.24, the WTA calculation is based on the income tax withholding rate applicable to supplemental wages. This may be higher or lower than your actual tax rate. The RITA, on the other hand, is based on your marginal tax rate, determined by your actual taxable income and filing status, which allows your agency to reimburse you for substantially all of your Federal income taxes. The RITA also reimburses you for any additional state and local taxes that you incur as a result of your relocation, because they are not reimbursed in the WTA process.
(b) The WTA may be optional to you. See § 302-17.61 for a discussion of criteria for choosing whether or not to accept the WTA. See §§ 302-17.62 through 302-17.69 for procedures if you choose not to accept the WTA.
§ 302-17.31   What are the procedures for calculation and payment of my RITA?
The procedures for the calculation and payment of your RITA depend on whether your agency has chosen to use a one-year or two-year RITA process. See Subpart F for the one-year process and Subpart G for the two-year process.
§ 302-17.32   Who chooses the one-year or two-year process?
Your agency or a major component of your agency determines whether it will adopt a one-year or two-year RITA process. Your agency may use the one-year RITA process for one or more specific categories of employees and the two-year process for one or more other categories.
§ 302-17.33   May I ask my agency to recalculate my RITA?
(a) Yes, you may ask your agency to recalculate your RITA provided you filed your “Statement of Income and Tax Filing Status,” and amended it, if necessary, in a timely manner. If, once you have completed all Federal, state, and local tax returns, you believe that your RITA should have been significantly different from the RITA that your agency calculated, you may ask your agency to recalculate your RITA. This is true for either the one-year or two-year process. With any request for recalculation, you must submit a statement explaining why you believe your RITA was incorrect.
(b) Please note that your agency may require that you also submit an amended “Statement of Income and Tax Filing Status” (if, for example, you inadvertently did not report some of your income in your original Statement), your actual tax returns, or both, as attachments to your request for recalculation.
Please see § 302-17.55, if your agency uses a one-year RITA process, or § 302-17.68, if your agency uses a two-year RITA process, for more information about positive and negative RITA calculations.
§ 302-17.40   How does my agency calculate my CMTR?
(a) The CMTR is a key element that greatly enhances the accuracy of the calculation of your RITA. Your agency uses the information on your “Statement of Income and Tax Filing Status,” as amended, to determine your CMTR, as follows (see subparts F and G of this part for information about the “Statement of Income and Tax Filing Status”).
(b) The CMTR is, in essence, a combination of your Federal, state, and local tax rates. However, the CMTR cannot be calculated by merely adding the Federal, state, and local marginal tax rates together because of the deductibility of state and local income taxes from income on your Federal income tax return. The formula prescribed below for calculating the CMTR, therefore, is designed to adjust the state and local tax rates to compensate for their deductibility from income for Federal tax purposes. Examples of how to calculate the CMTR are published in an FTR bulletin available at https://gsa.gov/ftrbulletins .
(c) The formula for calculating the CMTR is:
(d) Your agency finds the Federal marginal tax rate by comparing your taxable income, as shown in your “Statement of Income and Filing Status,” to the Federal tax tables in the current year's Form 1040-ES instructions (see §§ 302-17.50—302-17.53 and §§ 302-17.63—302-17.65 for additional information on the “Statement of Income and Tax Filing Status”).
(e) Your agency finds the state and local marginal tax rates that apply to you (if any) by comparing your taxable income to the most current state and/or local tax tables provided by the states and localities. Every Federal payroll office and every provider of tax calculation software has these tables readily available, and the tables are also available on the Web sites of the various state and local taxing authorities.
§ 302-17.41   Is there any difference in the procedures for calculating the CMTR, depending on whether my agency chooses the one-year or two-year RITA process?
No. The procedures for calculating the CMTR are the same for the one-year and two-year RITA processes.
§ 302-17.42   Which state marginal tax rate(s) does my agency use to calculate the CMTR if I incur tax liability in more than one state, and how does this affect my RITA and my state tax return(s)?
If two or more states that are involved in your relocation impose an income tax on relocation benefits, then your relocation benefits may be taxed by both states. Most commonly, your old and new duty stations are in the two states involved. The following table lays out the possibilities:
§ 302-17.43   What local marginal tax rate(s) does my agency use?
(a) If you incur local tax liability, you provide the applicable marginal tax rate(s) on your “Statement of Income and Tax Filing Status”. Your agency validates the applicable local marginal tax rate(s) and uses it (them) in the CMTR formula.
(b) If you incur local income tax liability in more than one locality, then your agency should follow the rules described for state income taxes in § 302-17.42 to calculate the local marginal tax rate that will be used in the CMTR formula and to compute your RITA, and you should follow the rules in § 302-17.42 to determine your actions.
(c) If a locality in which you incur income tax liability publishes its tax rates in terms of a percentage of your Federal or state taxes, then your agency must convert that tax rate to a percentage of your income to use it in computing your CMTR. This is accomplished by multiplying the applicable Federal or state tax rate by the applicable local tax rate. For example, if the state marginal tax rate is 6 percent and the local tax rate is 50 percent of state income tax liability, the local marginal tax rate stated as a percentage of taxable income would be 3 percent.
§ 302-17.44   What if I incur income tax liability to the Commonwealth of Puerto Rico?
A Federal employee who is relocated to or from a point, or between points, in the Commonwealth of Puerto Rico may be subject to income tax by both the Federal Government and the government of Puerto Rico. However, under current Puerto Rico law, an employee receives a credit on their Puerto Rico income tax for the amount of taxes paid to the Federal Government. Therefore:
(a) If the applicable Puerto Rico marginal tax rate, as shown in the tables provided by the Commonwealth of Puerto Rico, is equal to or lower than the applicable Federal marginal tax rate, then your agency uses the Federal marginal tax rates and the formula in § 302-17.40(c) in calculating your CMTR.
(b) If the applicable Puerto Rico marginal tax rate, as shown in the tables provided by the Commonwealth of Puerto Rico, is higher than the applicable Federal marginal tax rate, and if all of the states involved either have no income tax or allow an adjustment or credit for income taxes paid to the other state(s) and Puerto Rico, then your agency uses the rate for Puerto Rico in place of the Federal marginal tax rate in the formula in § 302-17.40(c).
(c) If the applicable Puerto Rico marginal tax rate, as shown in the tables provided by the Commonwealth of Puerto Rico, is higher than the applicable Federal marginal tax rate and one or more of the state(s) involved does not allow an adjustment or credit for income taxes paid to the other state(s) and/or Puerto Rico, then your agency uses the formula below:
§ 302-17.45   What if I incur income tax liability to the Commonwealth of the Northern Mariana Islands or any other territory or possession of the United States?
If you are relocated to, from, or within the Commonwealth of the Northern Mariana Islands or any territory or possession of the United States that is covered by the definition in § 302-17.1, your agency will have to determine the tax rules of that locality and then include those taxes in your RITA calculation, as applicable.
§ 302-17.46   What does my agency do if a state treats an expense as taxable even though it is nontaxable under the Federal IRC?
If one or more of the states where you have incurred tax liability for relocation expenses treats one or more relocation expenses as taxable, even though it (they) are nontaxable under Federal tax rules, you may be required to pay additional state income tax when you file tax returns with those states. In this case, your agency calculates a state gross-up to cover the additional tax liability resulting from the covered relocation expense reimbursement(s) that are nontaxable under Federal, but not state tax rules. Your agency calculates the state gross-up and then adds that amount to your RITA. Your agency will use this formula to calculate the state gross-up:
“N” is determined as follows:
1. Take the dollar amount of reimbursements, allowances, and direct payments to vendors treated as nontaxable under Federal tax rules.
2. Subtract the dollar amount of reimbursements, allowances, and direct payments to vendors treated as nontaxable by the state.
3. The difference represents “N.”
This calculation is the same, regardless of whether your agency has chosen to use the one-year or two-year RITA process.
§ 302-17.50   What information should I provide to my agency to make the RITA calculation possible under the one-year process?
You should provide the information required in the “Statement of Income and Tax Filing Status” as follows:
Statement of Income and Tax Filing Status—One-Year Process
§ 302-17.51   When should I file my “Statement of Income and Tax Filing Status” under the one-year process?
For the one-year process, you should file this form as soon as you receive your relocation orders, or as soon as you file your tax returns for the most recent tax year, whichever occurs later.
§ 302-17.52   When should I file an amended “Statement of Income and Tax Filing Status” under the one-year process?
You should submit an amended “Statement of Income and Tax Filing Status” to your agency under the one-year process whenever the information on it changes, and you should continue to amend it until you have received the last W-2 from your agency in connection with a specific relocation. In particular, you should file an amended version of this statement whenever:
(a) Your filing status changes;
(b) Your income changes enough that your income, including WTA and RITA, might put you into a different tax bracket; or
(c) You have taxable relocation expenses in a second or third calendar year.
Your agency will not be able to use your original or amended “Statement of Income and Tax Filing Status” if you file it after the cut-off date established by your agency in accordance with § 302-17.54(b).
§ 302-17.53   What happens if I do not file and amend the “Statement of Income and Tax Filing Status” in a timely manner?
If you don't file the “Statement of Income and Tax Filing Status” and/or amend it when necessary, your agency will switch to the 2-year process, and because the WTA is an advance of your income tax expenses, you will be liable to repay the full amount of the WTA that your agency has paid to the IRS. See subpart G of this part.
§ 302-17.54   How does my agency calculate my RITA under the one-year process?
(a) Your agency provides allowances to you, reimburses you for vouchers that you submit, and pays certain relocation vendors directly, all during the calendar year as described in subpart B of this part. Some of these reimbursements, allowances, and direct payments to vendors are taxable income to you, the employee, as described in subpart A of this part. Your agency computes a WTA and reports the WTA to the IRS as taxes withheld for you for each of these taxable reimbursements, allowances, and direct payments to vendors. The WTA may be optional to you. However, if your agency is using a one-year RITA process, there is no advantage to you in choosing not to receive the WTA, because your agency will adjust the WTA payment to the IRS. See § 302-17.55(a)(1).
(b) Your agency establishes a cutoff date (for example, December 1), after which it will not issue reimbursements or allowances to you or make direct payments to relocation vendors for the rest of the calendar year.
(c) If the information on your “Statement of Income and Tax Filing Status” changes after you have submitted the initial version, you must submit an amended “Statement of Income and Tax Filing Status” no later than your agency's cutoff date.
(d) During the period between the cutoff date and the end of the calendar year, your agency calculates your RITA.
(e) Your RITA is itself taxable income to you. To account for taxes on the RITA, your agency will gross-up your RITA by using a gross-up formula that multiplies the grossed-up CMTR by the total of all covered taxable relocation benefits, and then subtracts your grossed-up WTA from that total. That is:
§ 302-17.55   What does my agency do once it has calculated my RITA under the one-year process?
(a) Your RITA is likely to be different from the sum of the WTA computed and reported during the year, because the WTA is calculated using a flat rate, established by the IRC, while the RITA is calculated using the CMTR. Therefore:
(1) If the calculation above results in a negative value (that is, if your agency's calculation shows that it withheld and reported too much money as WTA), then your agency will send an adjustment to the IRS using Form 941. In this case, your agency does not make a RITA payment to you because you do not need additional funds to pay your taxes. That is, everything you need to pay substantially all of your taxes was included in the adjusted WTA, and that is the amount that will appear on your Form W-2.
(2) If the calculation above results in a positive value (that is if your agency's calculation shows that it did not withhold enough money for your income taxes), then your agency will pay your RITA to you before the end of the calendar year and report it to the IRS as part of your income for that year.
(b) Shortly after the end of the calendar year, your agency will provide one or two W-2 Forms to you. At your agency's discretion, you may receive one W-2 that includes all of your taxable relocation expenses, WTA, and RITA (if any), along with your payroll wages, or you may receive one W-2 for your payroll wages and a separate one for your taxable relocation expenses, WTA, and RITA.
§ 302-17.56   What do I do, under the one-year process, once my agency has provided my W-2(s)?
(a) You must use all W-2(s) that you have received to file your tax returns. On those returns, you must include all taxable relocation expenses shown on your W-2(s) as income, including your WTA and RITA (if any). Please note that you must also include all WTA as withholding, in addition to the standard withholding from your payroll wages.
(b) If you finished your relocation within one calendar year, and your agency paid all of your relocation reimbursements, allowances, and direct payments to vendors in the same calendar year, before the cutoff date, then your tax returns for that calendar year are the end of your relocation tax process. If, on the other hand, your agency reimburses you for relocation expenses, or pays allowances or relocation vendors on your behalf, during a second (and possibly a third) calendar year, then you and your agency repeat the process above for each of those years.
§ 302-17.60   How are the terms “Year 1” and “Year 2” used in the two-year RITA process?
(a) Year 1 is the calendar year in which the agency reimburses you for a specific expense, provides an allowance, or pays a vendor directly. If your reimbursements, allowances, and/or direct payments to vendors occur in more than one calendar year, you will have more than one Year 1.
(b) Year 2 is the calendar year in which you submit your RITA claim and your agency pays your RITA to you.
(c) In most cases:
(1) For every Year 1 you will have a corresponding Year 2;
(2) Every Year 2 immediately follows a Year 1; and
(3) Year 2 is the year in which you file a tax return reflecting your remaining tax liability for taxable reimbursement(s), allowance(s), and/or direct payments to vendors in each Year 1.
§ 302-17.61   Is the WTA optional under the two-year process?
(a) Yes. If your agency makes the WTA optional to you, you may choose to not receive the WTA.
(b) When deciding whether or not to receive the WTA, you should consider the following:
(1) If you expect that your marginal Federal tax rate will be equal to or higher than the supplemental wage rate for the calendar year in which you received the majority of your relocation reimbursements, you may want to elect to receive the WTA.
(2) If you expect that your marginal Federal tax rate will be less than the supplemental wage rate for the calendar year in which you received the majority of your relocation reimbursements, you may want to decline receiving the WTA to avoid or limit possible overpayment of the WTA, the so-called “negative RITA” situation. In a “negative RITA” situation, you must repay some of the WTA in Year 2. However, even if your marginal Federal tax rate will be less than the supplemental wage rate, you may want to accept the WTA so that your initial reimbursement is larger.
(3) Examples showing relocation allowances paid by accepting or declining the WTA are published in an FTR bulletin available at https://gsa.gov/ftrbulletins .
§ 302-17.62   What information do I put on my tax returns for Year 1 under the two-year process?
(a) Your agency provides allowances to you, reimburses you for vouchers that you submit, and pays certain relocation vendors directly, all during the same calendar year, as described in subpart B of this part. Some of these reimbursements, allowances, and direct payments to vendors are taxable income to you, the employee. Your agency computes a WTA and reports that withholding to the IRS for each of these that is taxable. This is Year 1 of the two-year process.
(b) If your agency makes the WTA optional to you and you have chosen not to receive the WTA, then your agency computes withholding tax for each taxable reimbursement, allowance, and direct payment, and reports that withholding to the IRS.
(c) Shortly after the end of the calendar year, your agency provides one or more W-2 forms to you. At its discretion, your agency may include all of your taxable relocation expenses and WTA (if any) in one W-2, along with your regular payroll wages, or it may provide you one W-2 for your regular payroll wages and a separate W-2 for your taxable relocation expenses and WTA (if any).
(d) At approximately the same time as your agency provides your W-2(s), it also may provide you an itemized list of all relocation benefits and the WTA (if any) for each benefit. You should use this statement to verify that your agency has included all covered taxable items in its calculations and to check your agency's calculations.
(e) You must submit all W-2s that you have received with your Year 1 tax returns. On those returns, you must include all taxable relocation expenses during the previous year as income. Furthermore, you must include the WTA (if any) as tax payments that your agency made for you during the previous year, in addition to the regular withholding of payroll taxes from your salary.
§ 302-17.63   What information should I provide to my agency to make the RITA calculation possible under the two-year process?
You should provide the information required in the “Statement of Income and Tax Filing Status” shown below. This information should be taken from the income tax returns you filed for Year 1.
Statement of Income and Tax Filing Status—Two-Year Process
§ 302-17.64   When should I file my “Statement of Income and Tax Filing Status” and RITA claim under the two-year process?
For the two-year process, you should file the “Statement of Income and Tax Filing Status” in Year 2, along with your RITA claim, after you file your income tax return. If your agency pays any taxable expenses covered by the WTA (if any) in more than one year, then you will have to file a new “Statement of Income and Tax Filing Status” each year. Your agency establishes the deadline each year for filing of your Statement.
§ 302-17.65   What happens if I do not file the “Statement of Income and Tax Filing Status” in a timely manner?
The WTA is an advance on your income tax expenses, thus if you don't file the “Statement of Income and Tax Filing Status” in a timely manner, your agency will require you to repay the entire amount of the withholding and WTA (if any) that the agency has paid on your behalf.
§ 302-17.66   How do I claim my RITA under the two-year process?
(a) To claim your RITA under the two-year process, you must submit a voucher and attach the “Statement of Income and Tax Filing Status,” as discussed in §§ 302-17.63-302-17.65.
(b) Your voucher must claim a specific amount. However, your agency will calculate your actual RITA after you submit your RITA voucher and your “Statement of Income and Tax Filing Status;” the amount you claim on your voucher does not enter into that calculation. You should perform the RITA calculation for yourself, as a check on your agency's calculation, but you are not required to put the “right answer” on the voucher you submit to claim your RITA.
§ 302-17.67   How does my agency calculate my RITA under the two-year process?
(a) Your agency calculates your RITA after receipt of your RITA voucher.
(b) Your RITA is itself taxable income to you. To account for taxes on the RITA, your agency will gross-up your RITA by applying the CMTR to the final amount rather than the reimbursed amount.
(c) Thus, your agency calculates your RITA by multiplying the Combined Marginal Tax Rate (CMTR) (using the state and local tax tables most current at the time of the RITA calculation) by the total of all covered taxable relocation benefits during the applicable Year 1, and then subtracting your WTA(s), if any, from the same Year 1 from that total. That is:
- If your agency offers you the choice, the WTA is optional to you. If the employee has declined the WTA, enter zero for element Z in the above calculation.
§ 302-17.68   What does my agency do once it has calculated my RITA under the two-year process?
(a) Your RITA is likely to be different from the sum of the WTA(s) paid during Year 1, if any, because the WTA is calculated using a flat rate, established by the IRC, while the RITA is calculated using the CMTR. Therefore:
(1) If the RITA calculation in § 302-17.67 results in a negative value (that is, if your agency's calculation shows that it withheld and reported too much money as income taxes), then your agency will report this result to you and will send you a bill for the difference, to repay the excess amount that it sent to the IRS on your behalf as withheld income taxes. The IRS will credit you for the full amount of withheld taxes, including the excess amount, when you file your income tax return for Year 1; therefore, you must repay the excess amount to your agency within 90 days, or within a time period set by your agency. If you are required to repay an amount in Year 2 that was included as wages on your W-2 in Year 1, you may be entitled to a miscellaneous itemized deduction on your Federal income tax return in Year 2. For more information, see IRS Publication 535, “Business Expenses.” If your agency chooses to offer you the choice, then you may want to decline the WTA to avoid this so-called “negative RITA” situation.
(2) If the RITA calculation in § 302-17.67 results in a positive value (that is, if your agency's calculation shows that it did not withhold enough money as income taxes), then your agency will pay your RITA to you before the end of Year 2 and will report it to the IRS as part of your income for that year. Also, after your agency has paid your RITA to you, it will provide a W-2 that shows your RITA as taxable income to you.
(b) At your agency's discretion, you may receive one W-2 that includes all of your taxable relocation expenses, WTA (if any), and RITA (if any), along with your regular payroll wages, or you may receive one W-2 for your regular payroll wages and a separate one for your taxable relocation expenses, WTA, and RITA.
§ 302-17.69   How do I pay taxes on my RITA under the two-year process?
When income taxes are due for Year 2, you must report your RITA, if any, as taxable income on your Federal, state, and local tax returns.
(a) If your relocation process results in only one Year 2, or if the previous year was your last Year 1, your RITA is the only amount that you report as income resulting from your relocation for that Year 2.
(b) If, on the other hand, your relocation process results in more than one Year 2 (if, for example, you incurred relocation expenses during more than one calendar year), then, except for your last Year 2, you will need to report reimbursements, allowances, direct payments to vendors, and WTA(s), if any, for succeeding Year 1's at the same time that you report each Year 2's RITA.
(c) See the table in § 302-17.60 for a graphic explanation of Year 1 and Year 2.
§ 302-17.100   May we use a relocation services provider to comply with the requirements of this part?
Yes. You may use the services of relocation companies to manage all aspects of relocation, including the RITA computation. Agencies that relocate few employees or do not have the resources to manage the complexity of relocation may find that the use of relocation companies is a practical alternative. As another alternative, agencies with infrequent requirements for relocation or with inadequate internal resources may establish an interagency agreement with one or more other agencies to pool resources to provide this service.
§ 302-17.101   What are our responsibilities with regard to taxes on relocation expenses?
To ensure that all provisions of this Part are fulfilled, you must:
(a) Prepare a relocation travel authorization that includes an estimate of the WTA and RITA, to obligate the funds that will be needed.
(b) Determine, in light of the specific circumstances of each employee relocation, which reimbursements, allowances, and direct payments to vendors are taxable, and which are nontaxable.
(c) Decide whether or not you will allow individual employees and/or categories of employees to choose not to receive the WTA.
(d) Calculate the WTA, and credit the amount of the WTA to the employee at the time of reimbursement.
(e) Prepare the employee's W-2 Form(s) and ensure that it (they) reflect(s) the WTA.
(f) Provide each employee an itemized list of relocation expenses after the end of each calendar year in which you provided an allowance, reimbursement, or direct payment to a vendor.
(g) Establish processes for identifying the relevant Federal, state, and local marginal tax rates and for keeping that information current.
(h) Establish processes for identifying states that treat a reimbursement or direct payment to a vendor as taxable even though it is nontaxable under the Federal IRC, and for keeping that information current.
(i) Calculate the employee's CMTR(s).
(j) Decide whether you will use the one-year or two-year RITA process and whether you will use different processes (that is, one-year or two-year) for different groups of employees within your agency.
(k) Make sure the RITA calculation is done correctly and in a timely manner, whether your policies call for the calculation to be done by you or by a third party.
(l) Make sure that payment of the RITA occurs in a timely manner (this is especially critical for the one-year process).
(m) Develop criteria for accepting and rejecting requests for recalculation of RITA.
(n) Establish a process for recalculating the RITA when the employee's request for recalculation is accepted.
(o) Consult with IRS for clarification of any confusion stemming from taxes on relocation expenses.
§ 302-17.102   What happens if an employee fails to file and/or amend a “Statement of Income and Tax Filing Status” prior to the required date?
(a) If a relocating employee does not file and/or amend a “Statement of Income and Tax Filing Status” prior to the required date, and you are using a one-year RITA process, you are to switch to a two-year RITA process and send a written warning to the employee reminding them of the requirement and informing them that if they do not submit the “Statement of Income and Tax Filing Status,” you may declare the entire amount of the WTA forfeited.
(b) If the relocating employee does not file and/or amend a Statement of Income and Tax Filing Status prior to the required date, and you are using a two-year RITA process, you are to send the employee a written warning informing them they have 60 days to file or amend their “Statement of Income and Tax Filing Status,” or you will declare the WTA that you have already paid on the employee's behalf forfeited and due as a debt to the Government.
(c) If the relocating employee chose not to receive the WTA and fails to file a Statement of Income and Tax Filing Status prior to your required date, you are to send the employee a written warning that they have 60 days to file. If the employee still fails to file, you may close your case file and refuse any later claims for RITA related to this specific relocation.
§ 302-17.103   What are the advantages of choosing a 1-year or a 2-year RITA process?
(a) The one-year process is simpler. It reimburses the employee more quickly, and it eases the administrative burden required to calculate the RITA. Most importantly, the one-year process eliminates the possibility of charging employees for excess payments to the IRS, the so-called “negative RITA.”
(b) The two-year process provides a somewhat more accurate calculation of the additional taxes the employee incurs because it is based on the employee's actual Year One taxable income and filing status rather than the taxable income and filing status from the year before.