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Office of the Controller


Tax Cuts and Jobs Act 2017

The Controller’s Office is currently analyzing the impact of the Tax Cuts and Jobs Act passed by Congress in December 2017. Income tax withholding and moving expense taxability are two changes, although we expect additional guidance on other effects to USC and our employees.

Withholding

Tax reform changes effective January 1, 2018 include updates to the tax rates and brackets used to determine the amount of Federal income tax withheld from each paycheck. As a result, many employees will see an increase in take-home pay beginning with the February 15 pay date. The Internal Revenue Service (IRS) suggests that taxpayers review their withholding for 2018 based on these new rates and tax brackets. The new IRS withholding tables and answers to frequently asked questions are available on the IRS website.

Moving/Relocation

The Tax Cuts and Jobs Act eliminates the deduction for qualified moving expenses effective January 1, 2018. All moving expenses, whether previously deductible or not, are now taxable to employees if reimbursed or paid on their behalf. Due to this federal law change, the University will adopt a moving allowance policy going forward. If a department wishes to pay an amount towards relocation costs for a new hire, they will do so through a moving allowance.

Details on the new policy and procedures will be released in the coming weeks.

Moving expenses that were incurred in 2017 can be reimbursed through February 28, 2018. These reimbursements may be taxable or nontaxable, depending on the type of expenses (qualified or non-qualified) per the previous tax law and as allowed per the current version of University Policy FINA 1.08. 

Questions

If you have any questions about the tax changes, please contact the University’s Payroll Office