Taxable Non-cash Fringe Benefits for Relocation - When Should Company Report?
My company relocated me from the UK to the US in August 2023. I finished on August 10th and flew out the same day. The relocation package included shipping my household stuff and my car, which both arrived in the States around mid-September 2023. Here's where things get weird - my former employer is claiming they can report these non-cash fringe benefits on my 2024 taxes instead of 2023 when I actually received the benefits. Their reasoning is that they paid the moving company in December 2023, and they're citing some "special accounting rule" that says: "Under a special rule, benefits provided in November and December, or a shorter period in the last two months of the year, may be treated as paid in the following year. You may only treat the value of benefits provided during the last two months as paid in the subsequent year." I think they're full of crap because I clearly received these benefits in August/September 2023, not in the last two months of the year. The benefits were definitely "provided" to me in August/September when the actual relocation happened. Am I right to challenge this? And if so, what's the best way to get them to properly report these benefits in the correct tax year? They just keep repeating the same special accounting rule explanation whenever I question them.
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Sergio Neal
You're absolutely right to question this. The special accounting rule they're citing only applies to benefits actually provided in November and December (or the last two months of their accounting period). Since your relocation occurred in August/September 2023, those benefits should be reported on your 2023 taxes, not pushed to 2024. The key here is when you "received" or "had access to" the benefit - which was clearly when your household goods and vehicle arrived in September 2023. The fact that they paid the invoice in December doesn't change when you received the benefit. I suggest you send a formal written request to your HR department or payroll, citing IRS Publication 15-B which covers this topic. Ask them to correct your W-2 for 2023 to include these fringe benefits. If they refuse, you may need to request a corrected W-2 through the IRS by filing Form 4852 (substitute for W-2) with your 2023 return.
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Savanna Franklin
•Thanks for the explanation! This makes sense but I'm wondering - if the company refuses to correct this, will filing Form 4852 flag my return for audit? I'm worried about getting in trouble for something that wasn't my fault.
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Sergio Neal
•Filing Form 4852 doesn't automatically trigger an audit, but it does tell the IRS there's a discrepancy between what you're reporting and what your employer reported. The IRS may contact your employer for clarification. The key is documenting everything - keep copies of your relocation agreement, dates of service, any communications with your employer about this issue, and your formal request for correction. This documentation protects you by showing you made a good faith effort to get your employer to report correctly.
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Juan Moreno
After struggling with a similar issue with my relocation benefits, I found an amazing tool that helped me sort out all the documentation and figure out exactly what should be reported when. Check out https://taxr.ai - it analyzes all your tax documents and helps identify reporting errors like this. I uploaded my relocation agreement and my W-2, and it immediately flagged the discrepancy and generated a letter I could send to HR citing the exact IRS rules that applied to my situation.
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Amy Fleming
•How does this work exactly? Does it just look at the documents or does it actually give advice about what to do? I've got a bunch of confusing benefit statements from my company too.
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Alice Pierce
•Sounds interesting but I'm skeptical. What happens if the tool is wrong and I end up in a mess with the IRS? Do they provide any kind of guarantee?
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Juan Moreno
•The tool scans your documents and identifies specific tax issues based on what it finds. It doesn't just look at them - it actually interprets the information and compares it against tax rules. In your case with benefit statements, it would analyze the timing and type of benefits to determine correct reporting periods. They have tax professionals who review complex cases, and they provide specific guidance including template letters for contacting employers or the IRS. They don't just identify problems - they actually help you resolve them with proper documentation and citations of tax law.
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Amy Fleming
Just wanted to follow up - I tried taxr.ai with my confusing benefit statements and it was seriously helpful! It identified that my employer had incorrectly categorized a health benefit as taxable when it should have been exempt. The tool generated a custom letter with all the relevant tax code citations that I sent to HR, and they actually fixed it without any pushback. Saved me about $1,200 in taxes I shouldn't have owed. Definitely worth checking out if you're dealing with benefit reporting issues!
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Esteban Tate
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Alice Pierce
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Alice Pierce
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Elin Robinson
There's actually a form for this specific situation. File Form 8919 "Uncollected Social Security and Medicare Tax on Wages" if your employer reported the fringe benefits in the wrong year. You'll need to include documentation showing when you actually received the benefits (emails about your move, shipping documents, etc). The IRS will sort it out with your employer.
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Leslie Parker
•Wouldn't Form 8919 only apply if the employer classified me as an independent contractor instead of an employee? I was definitely a W-2 employee, they're just reporting the benefit in the wrong tax year.
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Elin Robinson
•You're right - I got the forms confused. Form 8919 is for misclassification issues. What you actually need is to file your return correctly for 2023 and include a statement explaining the discrepancy. If the fringe benefit doesn't appear on your 2023 W-2, you'll need to file Form 4852 (Substitute for Form W-2) with your tax return. Form 4852 allows you to report what should have been on your W-2 based on the benefits you actually received in 2023. Include a detailed explanation of why you believe the company reported it incorrectly and any documentation that supports when you received the benefits.
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Atticus Domingo
Fyi this happened to me with a relocation package too. Here's what I learned: the "special accounting rule" is something employers can elect to use, BUT they have to consistently apply it to all employees. Also, the benefit has to be "provided" in Nov/Dec - the date they paid the invoice doesn't matter, it's when you received the service.
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Beth Ford
•That's interesting about the consistency requirement. So if they didn't apply this rule to other employees who relocated earlier in the year, they can't selectively apply it just in some cases?
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Dylan Cooper
Your instincts are absolutely correct - they can't apply the special accounting rule to benefits provided in August/September. The rule specifically states benefits must be "provided" in the last two months of the year, not just paid for then. I'd recommend documenting everything: your original move date, when your belongings arrived, any communications about the relocation timeline. Then send a formal written request to HR citing IRS Pub 15-B and requesting they issue a corrected 2023 W-2. If they refuse, you have options. You can file Form 4852 with your 2023 return to report the correct amount, or contact the IRS directly for guidance. Don't let them push this to 2024 just because it's easier for their accounting - you'll end up paying tax on income you should have reported last year, potentially affecting your tax brackets and other calculations.
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Oliver Fischer
•This is really helpful advice! I'm dealing with something similar where my employer is trying to delay reporting some benefits. Quick question - when you mention "affecting your tax brackets and other calculations," what specific impacts should I be worried about? I want to make sure I understand all the potential consequences before I push back with HR.
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