Lawmakers urge GSA to address tax code change affecting feds

Two Democratic lawmakers have joined together to urge the General Services Administration to take quick action and address a tax code change that eliminated the deduction for job-related moving expenses for federal employees.

The U.S. Tax Code President Trump signed into law earlier this year also excludes reimbursements or in-kind contributions made by employers to defray the cost of moving.

“It has come to our attention that, as a result of changes in the tax code some federal employees have unexpectedly had hundreds or thousands of dollars taken out of their pay to cover additional withholding on costs related to a duty change,” Virginia Sens. Mark Warner and Tim Kaine, wrote in a letter dated April 24 to General Services Administrator Emily Murphy.

Earlier reports found that the changes have led to employees facing a one-time deduction from their paychecks of up to $7,000, according to the Senior Executives Association, which has been fielding complaints, and about 25,000 federal employees per year are affected by the new tax liability.

The pair notes that the federal government has polices in place—such as the relocation income tax allowance and the withholding tax allowance, to make these employees whole—but they have not yet been adjusted to take into account the changes in the tax reform bill.

“The federal workers financially affected by this problem are uprooting their lives in order to go where the public needs them most. It is unfortunate that the response to their willingness to relocate for the public good is to then send them a bill," the letter states. It urges GSA to move quickly.

The SES thanked the lawmakers for their efforts.

“We appreciate the leadership of Senators Warner and Kaine in ensuring this error—which has the potential to cause considerable personal damage to thousands of federal employees — is swiftly remedied,” Senior Executives President Bill Valdez, said.

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

Contributors

Edward A. Zurndorfer Certified Financial Planner
Mike Causey Columnist
Tom Fox VP for Leadership and Innovation, Partnership for Public Service
Mathew B. Tully Legal Analyst

Free E-Newsletter

FederalDAILY

I agree to this site's Privacy Policy.

Stay Connected

Latest Forum Posts

Ask the Expert

Have a question regarding your federal employee benefits or retirement?

Submit a question