Travel & Relocation

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RELOCATION INCOME TAX (RIT)
ALLOWANCE (302-17)

Each time a voucher is processed and Federal income tax is withheld, a Withholding Tax Allowance (WTA) will be calculated and paid to the traveler to offset the 28 percent Federal income tax withholding (does not include FICA/HIT Tax offset). The WTA protects the employee from having to use a substantial part of his or her reimbursement to pay Federal withholding taxes. The WTA is taxable and will be included on the employee’s W-2 for the year in which the payments are made.

All taxable expenses that are reimbursed to an employee are subject to a withholding tax allowance (WTA), which is an estimated amount paid to the employee at the time the expense voucher is processed. A relocation income tax (RIT or RITA) allowance is intended to reimburse employees for substantially all of the additional Federal, State, and local income taxes incurred by the employee, or by the employee and spouse, if a joint tax return is filed, as a result of certain travel and transportation expenses and relocation allowances for which reimbursement was provided by the Government. Each tax year, the Internal Revenue Service provides applicable tax tables to the National Finance Center. Once these tables are loaded in NFC, RIT claims may be processed. This normally happens in the month of April or May following the close of the previous tax year.

The employee must file a RIT Claim on an AD-616R, Travel Voucher (Relocation), along with an AD-1000, Claim for Relocation Income Tax Allowance; also the employee’s and spouse’s W-2's, Wage and Tax Statement, and Federal 1040 tax form may be required. Contact your travel office for specifics.

If when calculated, the amounts of tax withheld from the expense voucher were too much, the employee will receive a refund. If not enough taxes were withheld the employee will be billed. Payment of taxes will not be waived by the agency.

When an employee signs their Service Agreement to remain in the Government for 12 months the employee also agrees to file a RIT claim. If a RIT claim is not filed the employee will be billed for the amount of WTA that was paid to the employee. Repayment of a WTA will not be waived by the agency.

SAMPLE:

NOTE: This is a sample only and does not constitute an actual amount of refund.

Last Updated 10/02/2007