Comptroller's Office
 Policies and Procedures Manual

Effective: 03/25/2000
Revised: 08/19/2013 

CMP 420-03: Moving Expenses


To provide guidance to managers and employees on when and what expenses may be considered for reimbursement of eligible moving expenses as part of a highly competitive hiring.


Internal Revenue Service
University policy


NAU may, at the discretion of the president, provost or vice president in exceptional cases, reimburse reasonable and eligible moving expenses for full-time faculty and staff (e.g., moving household goods and personal effects and traveling to their new home). Generally, moving expense reimbursement is restricted to new faculty and staff who meet the Internal Revenue Service qualifying tests for deductibility, although there may be limited exceptions. Additionally, reimbursement is normally provided only for expenses that meet the IRS definitions for deductible items.

The president, provost and each vice president will determine eligibility for moving expense reimbursement, the maximum amount of reimbursement and any exceptions to the types of moving expenses that will and will not be reimbursed. The maximum moving expense reimbursement must be stated in the new employee's offer of employment letter. The reimbursement amount is limited to five percent (5%) of annual salary, unless the president, provost, or vice president authorizes an exception.

This policy applies to all moves regardless of the dollar amount or source of funds.

Reimbursement of moving expenses should be considered as a normal cost of recruitment and departmental operations. Adjustments to the departmental budget may be necessary.

The employment request must identify the source(s) of funds for the reimbursement. Moving allowances must be identified at the time of the offer and included in the written offer of employment.

The intent of this policy is to reimburse, when deemed necessary, the new employee for allowable relocation expenses to facilitate his/her move, consistent with good business practices and budgetary limitations. Such reimbursements must be justified on the basis of the competitive nature of the hiring and the unique qualifications of the applicant.

Specific guidelines and allowable expenses and limits on reimbursement amounts are provided in the appendices to this policy. The prospective employee should receive a copy of the university's policy and guidelines immediately after the acceptance of the offer. The prospective employee is responsible for complying with the relevant IRS reporting and documentation requirements.

Northern Arizona University employees receiving a moving allowance may be required to reimburse the university for all, or part, of the reimbursement if the employee resigns prior to a period of employment less than 24 months.


1.  Departmental budget plans must include recruitment expenses, including any anticipated moving expense reimbursements.

2.  Recruitment and employment offers must follow prescribed policies and procedures, as established by the president, provost, or applicable vice president.

3.  Employment offers with moving expense reimbursement must be approved by the vice president of the appropriate organizational unit. At the time of the approval for the offer, there must be a designated budget for the expenses.

4. If the employment offer contains a moving expense reimbursement, the offer must include the amount authorized as well as a link to the Moving Policy. The moving expense reimbursement amount is limited to five percent (5%) of annual salary, unless the president, provost, or applicable vice president authorizes an exception in writing. 

5.  The Department must complete an Employee Moving Expense Reimbursement Authorization to Pay form and attach the necessary documentation, such as any written exception to the 5% amount.   Effective July 1, 2011 there is no longer a need to complete a PAR form.

6.  The Dept/Unit manager, and if necessary, the president, provost, or applicable vice president, must approve the request for reimbursement before it is submitted to the Budget Office and  Human Resources by signing the Employee Moving Expense Reimbursement Authorization to Pay form.

7.  Reimbursement will be paid on a separate payroll check on the next pay day after valid form received in HR (subject to payroll deadlines).

8.  Reimbursed moving items that are nondeductible according to the current IRS requirements, e.g. Publication 521, will be included in the employee's Form W-2 as compensation.

  1. If the employee voluntarily leaves the university within 24 months from the date of hire, the department must notify Human Resources in writing that the employee has left NAU and must repay a prorated amount of the moving expense reimbursement paid to the employee.   The notice must include the dollar amount of the original moving reimbursement, and approximate date when the moving expenses were paid.

A.    Human Resources will then adjust the final paycheck if the notification is received before the final check has been processed or will initiate collection activities.

B.     Repayment Schedule: Moving allowances repayment amount will be prorated by the number of full months worked.

C.  The president, provost, or appropriate vice president may authorize an exception to the repayment provision.  Exceptions must be reviewed with Human Resources prior to authorization and the reasons for the exception must be documented and retained in departmental records, subject to audit.

Appendix A


NAU is required by the Internal Revenue Service (IRS) to report moving expense reimbursements made to, or for, employees. What is reported to the IRS is determined by relevant IRS guidelines and regulations. In general, reimbursements for "deductible" expenses related to moving are not reported as taxable income in the individual's W-2 form. The following discussion is provided for clarification only. Employees should refer to the appropriate IRS publication for current information and to determine their reporting and documentation requirements.


To determine whether or not the reimbursement is reported as taxable income to the employee, two factors are considered:

In general, a move will meet the Internal Revenue Service (IRS) deductibility tests if you meet:

  1. The 50 mile distance test
  2. A time test for remaining in the new location

If either qualifying test is not met, the moving expenses are considered nondeductible and any reimbursement made by NAU is considered taxable income to the employee and will be reported as such to the IRS. Reimbursement of deductible expenses is not taxable income. (Examples of deductible and nondeductible expenses are provided below.)

Reimbursement of the following deductible expenses may be made to the employee:

  1. The transportation of household goods and personal effects
  2. Travel by the employee and immediate family members to the new household (one trip) including lodging, actual automobile expenses or mileage reimbursed at the current IRS approved mileage rate per mile and parking or toll charges incurred while moving, approved mileage rate changes periodically, please check IRS Notice 2013-01.
  3. Storage of household goods and personal effects (subject to 30 day limit)
  4. Car shipping costs


Nondeductible moving expenses are considered additional taxable compensation to the new employee and must be processed through the Payroll Office. The nondeductible moving expense reimbursement will be subject to federal and state income taxes and Social Security and Medicare taxes. All Dept/Units authorizing reimbursement of nondeductible expenses will incur applicable employee-related expenses (ERE). Reimbursed nondeductible moving expenses will be included, net of taxes, in the employee's annual IRS W-2 in Box 1.

Examples of nondeductible moving expenses:

  1. Meal and Incidental Expenses (M&IE) for the employee while in transit to NAU. M&IE can be reimbursed by standard state of Arizona amounts or by submission of receipts.. M&IE  amounts are based on the standard state of Arizona amounts. Reimbursement can also be made by submission of receipts not to exceed the state of Arizona M&IE  rate. Effective 1/01/2008 the current daily amounts for Grand Canyon/Flagstaff Arizona State M&IE  are as follows: Breakfast - $8.00, Lunch - $11.00 and Dinner $20.00. The total amount allowed per day for the employee is $39.00. For additional information go to Arizona State M&IE for rates.
  2. Mileage expense reimbursed at a rate higher than the IRS approved mileage rate, the approved mileage rate changes periodically, please check the IRS Notice 2013-01. The maximum mileage rate for moving expense reimbursement purposes is the State of Arizona mileage reimbursement rate found at Arizona State M&IE. Please note that the IRS approved rate is not taxable income but any amount reimbursed to the employee above the IRS rate is considered taxable income.
  3. Pre-moving house hunting expenses

Human Resources will review each moving expense reimbursement before it is processed for payment. Additional information  may be obtain by calling the IRS at 1-800-829-3676. 

Appendix B

Guidelines and Allowable Items

1) For employees and their immediate family members traveling by air or other passenger conveyance, the cost of the most economical airfare available for each member of the family is allowable

2) For employees and their immediate family members traveling by automobile, the following is allowable:

  1. The cost of driving one automobile only for the most direct route between the previous residence and the new permanent residence. Mileage is reimbursed at the current IRS approved rate he approved mileage rate changes periodically, please check the first page in IRS Notice 2013-01 for the most recent rates.
  2. For each 500 miles by the most direct route between the previous residence and the new permanent residence, lodging and  M&IE expenses may be disbursed not to exceed $125.00 per 500 miles which must be substantiated with receipts.
  3. If an individual is required to begin university employment prior to the relocation of his/her immediate family, that employee may be allowed reimbursement for either (1) the cost of a round-trip airline ticket at the most economical airfare available, or (2) the cost of traveling by automobile as defined above in addition to relocation expenses for his/her family.

3) Reimbursement for moving household goods may not exceed actual cost incurred, but in any case will not exceed the cost of moving 12,000 pounds

4) The allowable cost of insurance for household goods is not to exceed full replacement value of $5.00 per pound, per article, with no deductions. The maximum amount of insurance that may be obtained is $60,000 (12,000 pounds x $5.00).

5) Packing of household goods and appliances and appliance disconnect/hookups is allowable.

6) Relocation expenses which are not reimbursable include, but are not limited to the following items:

  1. Moving of: air conditioners, extensive hobby equipment, portable swimming pools, airplanes, farm equipment, recreational vehicles, animals, firewood, shop tools, automobiles, lumber, snowmobiles, boats, perishable foods, storage buildings, building materials, playhouses, storage sheds, and trailers.
  2. Special insurance for antiques, coin collections, paintings and similar items of high intrinsic value.
  3. Maid services, overtime charges to movers, intermediate kennel and/or veterinary charges unless move is to a foreign country.

7) Expenses of the employee and/or his/her immediate family incurred after arriving at the principal site of employment are the responsibility of the employee.

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