Corporate Relocation Tax Benefits 2024: How Volusia County Businesses Can Maximize Deductions and Employee Assistance Programs

As businesses continue to navigate the evolving landscape of corporate relocations in 2024, understanding the complex tax implications and available benefits has become crucial for both employers and employees. With the Tax Cuts and Jobs Act of 2017 eliminating most moving expense deductions for employees, making relocation benefits taxable income, companies must now adopt more strategic approaches to help their workforce relocate while managing costs effectively.

The Current Tax Landscape for Corporate Relocations

The tax environment for corporate relocations has fundamentally changed since 2018. Unlike the previous tax landscape where moving expenses were deductible, employees currently cannot offset their moving expenses against their income, and instead the reimbursement they receive is taxed as income. This means that all relocation benefits that an employee receives are taxable, regardless of whether the funds are paid upfront in a lump sum, as after-the-fact reimbursements, or even if the employer pays vendors directly.

For Volusia County businesses, this creates both challenges and opportunities. If you are a business paying for all, or a portion, of an employee’s moving expenses, the amount you spend is still considered a business expense, which means you can deduct the amount from the company’s taxes. However, this puts employees at a disadvantage, making relocation packages less attractive without proper tax assistance.

Maximizing Tax Benefits Through Gross-Up Strategies

To address the tax burden on employees, many forward-thinking companies are implementing tax gross-up strategies. A relocation gross-up is when an employer offers an employee the gross amount owed to them in taxes, and with the help of the added gross income, employees will feel relieved from the tax liability that comes with expenses from relocation.

There are two primary gross-up calculation methods:

• Flat Method: A flat percentage that is calculated on taxable costs and then added to the employee’s income, with employers typically grossing-up at a 30 percent rate for taxable costs
• Supplemental Method: Usually used because the employee’s relocation expenses and gross-up are considered income, with the employer paying the gross-up on the gross-up

Volusia County Business Advantages

Volusia County offers an attractive business environment that can enhance the appeal of corporate relocations. In Volusia County, you can control your costs, reduce your tax burden and plan your growth in a collaborative environment. The county has recently streamlined business operations by repealing the ordinance requiring a Volusia County business tax receipt effective January 1, 2024, meaning a Volusia County business tax receipt is no longer required for any business located within Volusia County.

Additionally, Florida has a 6% sales tax and Volusia County collects an additional 0.5%, so the minimum sales tax rate in Volusia County is 6.5%, which remains competitive compared to other regions. The area also benefits from Qualified Target Industry Tax Refund incentives available for creation of high wage jobs in targeted high value-added industries, including refunds on corporate income, sales, ad valorem, intangible personal property, insurance premium, and certain other taxes.

Comprehensive Employee Assistance Programs

Modern relocation packages go far beyond basic moving expenses. The average job relocation package is $72,000-$97,000 for homeowners and $19,000-$24,000 for renters, reflecting the comprehensive nature of today’s assistance programs.

Effective employee assistance programs should include:

• Temporary Housing: Standard relocations include at least 30 days of temporary housing for transferees
• Family Support: Spousal employment assistance in the new location and school location assistance for school-age children
• Home Sale Assistance: Company-sponsored reimbursement for money lost on quick home sales, and professional marketing to accelerate the timing of sales
• House-Hunting Support: At least one (preferably two) company-paid house hunting trips of short duration to give the transferee and family opportunities to find new homes

State-Specific Tax Considerations

While federal deductions for moving expenses remain suspended for most taxpayers, some states have retained the ability for residents to claim deductions for moving expenses on their state income tax returns, and employers and individuals undergoing relocations should be aware of such state-specific provisions. Florida’s tax-friendly environment, with no state income tax, makes it an attractive destination for corporate relocations.

Working with Professional Relocation Services

For businesses in Volusia County looking to implement effective Corporate Relocation Volusia County, FL programs, partnering with experienced providers is essential. Companies like Safe Hands Relocations, a family-owned and veteran-operated business based in the area, understand the unique challenges of corporate moves. Unlike moving brokers, they are the actual moving carrier, so you can work directly with the company handling your move, cutting out the middleman, and all of their movers are professionally trained, background-checked, and randomly drug-tested.

Looking Ahead: Future Tax Changes

Many provisions of the Tax Cuts and Jobs Act are scheduled to sunset on December 31, 2025, including the treatment of employer-paid relocation expenses, and if no new laws are enacted between now and then, IRS rules would revert to pre-2018 status—which means paid relocation expenses would no longer be taxable to employees. However, businesses should plan for the current tax environment while staying informed about potential legislative changes.

Conclusion

Successfully navigating corporate relocation tax benefits in 2024 requires a comprehensive understanding of current tax laws, strategic implementation of gross-up policies, and leveraging local advantages like those offered in Volusia County. Mobility benefits are increasingly used as negotiation tools for new hires and internal transfers, with some employers even offering more generous employee relocation packages to attract talent to labor-deficient areas. By combining tax-efficient strategies with comprehensive employee assistance programs, Volusia County businesses can create compelling relocation packages that attract top talent while managing costs effectively.