[Code of Federal Regulations]
[Title 41, Volume 4]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 41CFR302-17.6]

[Page 206]
 
           TITLE 41--PUBLIC CONTRACTS AND PROPERTY MANAGEMENT
 
                   CHAPTER 302--RELOCATION ALLOWANCES
 
PART 302-17_RELOCATION INCOME TAX (RIT) ALLOWANCE--Table of Contents
 
Sec. 302-17.6  Procedures in general.

    (a) This regulation sets forth procedures for the computation and 
payment of the RIT allowance and defines agency and employee 
responsibilities. This part does not require changes to those internal 
fiscal procedures established by the individual agencies pursuant to IRS 
regulations, or the Treasury Financial Manual, provided that the intent 
of the statute authorizing the RIT allowance and this part are not 
disturbed.
    (b) The total amount reimbursed or paid to the employee, or on his/
her behalf, for travel, transportation, and other relocation expenses 
and allowances is includable in the employee's gross income pursuant to 
the IRC and certain State or local government tax codes. Some moving 
expenses for which reimbursements are received may be deducted from 
income by the employee as moving expense deductions, subject to certain 
limitations prescribed by the IRS or pertinent State or local tax 
authorities. Reimbursements for nondeductible moving expenses are 
subject to income tax. (See IRS Publication 521 entitled ``Moving 
Expenses'' and the appropriate State and local tax codes for detailed 
information.)
    (c) Usually, if the employee is reimbursed for nondeductible moving 
expenses, the amount of these reimbursements is subject to withholding 
of Federal income tax in accordance with IRS regulations at the time of 
reimbursement. Under existing fiscal procedures, the amount of the 
employee's withholding obligation is usually deducted either from 
reimbursements for the moving expenses at the time of reimbursement or 
from the employee's salary. (See Treasury Financial Manual.)
    (d) Payment of a WTA established herein will offset deductions for 
the Federal income tax withholding on moving expense reimbursements, and 
on the WTA itself, from the employee's moving expense reimbursements or 
from salary.
    (e) The total amount of the RIT allowance can be computed after the 
end of Year 1 as soon as the earned income level, income tax filing 
status, total covered taxable reimbursements, and the applicable 
marginal tax rates can be determined. Employee claims for the RIT 
allowance should be submitted in accordance with this part and the 
employing agency's procedures.
    (f) Procedures are prescribed in Sec. Sec. 302-17.7 and 302-17.8 
for computation and payment of the WTA and the RIT allowance. These 
procedures are built on existing fiscal procedures and IRS regulations 
regarding reporting of employee income from reimbursements and 
withholding of taxes on supplemental wages.