Bob

Only if they pay direct. If they're giving you $10K, then that's taxable money.

It needs to be grossed up, or you budget losing up to 30% of it.

anork

The wording from my offer contract is: "The Company will supply you with $10,000 to cover relocation expenses. Expense reports and receipts are required to support this amount. If less than $10,000 is used the remainder will be owed to the Company. If the Company is not reimbursed for the unused portion, it will be added to your W2 as taxable income."

Jerseygirl

Have you been working for the company during your 3 month stay?

Hotscot

If you left within the year would you be going back to the old job or be unemployed?

anork

Unemployed

md95065

This is at least slightly dubious.

Essentially they are trying to pay you "under the table" for your relocation by trying to make it look like reimbursed business expenses.

If the IRS ever looked at this closely (which they very probably won't, but you never know ...) they might very well take the position that this was a "benefit" not a "business expense" and should, therefore, be treated as taxable income. The fact that your employer doesn't declare it as taxable income on your W2 doesn't absolve you from the responsibility to report it as "income" if that is what it really is. The things that the IRS will allow as genuine relocation expenses are actually pretty limited.

md95065

It might be better not to answer that question.

Giantaxe

It's a very oddly worded paragraph, but I guess they are doing two things here. Firstly, they're using the "income exclusion " tax option for transportation of household goods and travel expenses. Secondly, they may only want you to use the $10k for those specific moving expenses under "threat" of adding the whole of the $10k (or the "unused portion" of the $10k - what does the "it" in "it will be added" refer to?). And even if the whole of the $10k were added to your W2, you'd still be able to deduct those two items (transportation of goods/ travel expenses) from your income as deductible moving expenses.

It seems an idle threat to me, but I would certainly query what they are trying to do here. And if they're trying to expense for items other than those specific two, they are probably in dubious tax territory.

See under "Options for household goods and travel expenses" for an explanation:

http://www.worldwideerc.org/resource...0209scott.aspx

Edit: I see this bullet on the requirements for the "income exclusion":

"the transferee must return to the employer any excess of advances over actual expenses within a reasonable time; "

So that's why they want the balance back. Essentially they are providing you with a pot of up to $10k to cover the two specific items above. But.... you could simply keep the whole $10k, let them add it all to your W2 and then deduct from your income the portion that is deductible as a moving expense, which includes the two items! Strange.

Of course, ideally, they would "gross up" the entire $10k so that you have no tax liability regardless of whether you use it entirely for deductible relocation expenses. But you're being offered a more constrained package than that.

Sally Redux

What happens if you don't go?

anork

I return to my job in the UK. Admittedly, at that point, I'll hand in my notice as soon as I've found something else. It's SF or bust for this particular company for me.

anork

Thanks to all who have commented so far.

I'm 22h from my return flight and coming closer to a decision. I've written the following email, however, I'm wordy at best when it comes to difficult or emotional messages. If anyone can help me reword it so that it's earnest, friendly, ultimately inviting a positive response, but a little more concise, I'd be hugely grateful:

"Thank you for your kind offer, and the grace with which you have entertained my amendment requests.
I am 100% focussed and driven by the opportunity to work for [company name] SF and help it move its Technology department into another echelon. However, at this time I'm unable to accept the offer as-is.

This is not a decision I've found easy, nor have I taken it lightly. My family and domestic partner will be remaining in the UK for the next 12 months, and my motive in requesting amendments has been to achieve financial security and the time and capacity to ensure I can visit them. They live in a house I own, for example, the tax on which I will have to pay in the US.

To this end, if you would be able to consider favourably the following requests, I would gladly be able to accept:

- $7k base increase, or $5k relocation fund increase
- Clarity / specificity around bonus
- Two additional return flights per year
- Relocation package refund pro-ration one year earlier

You'll have noticed prior to this email that it's not been in my nature to tersely assert my requests. However, I humbly submit that the above is not above my market value - measured by data I have received from SF recruiters, and an invitation I've received for a similar role in the area.

However, my motivation is to work for a company I love - [company name] - and being fairly valued while giving my all.

Please do let me know if the above can be agreed as I would love to return ASAP and get going.

If we're unable to agree these or similar amendments, I would like to offer my sincere thanks for the opportunity to work for [company name] SF. In this event, if you would like me to return on a further temporary basis in order to help deliver [Project X worth $1.7m], and the requested re-architecture of [Project Y worth $600k], I would be very happy to serve.

Many thanks
"

p.s. They've already called my bluff once followed by upping the offer by $5k, hence wanting to not be too direct

anork

Thanks! That ties in with what I suspected. If it's taxable income, I hardly think it's fair that it would be included in the refundable amount. I'm not sure what "ideally they would 'gross up' the entire $10k" means though, as in how I would word such a request

Sally Redux

4 return flights a year?

Will be interested to see if they go for it.

Jscl

I think you are expecting UK style benefits in a US environment. That's not to say you shouldn't try for them, but they might be seen as unreasonable or just strange. Also the style of your letter is very British, and might also seem strange or might work to your benefit, depending who's reading it.

My comments on content:

How many vacation days are they offering? Four flights to London.. are you staying a week each and expecting four weeks of vacation? 20 days is a lot in the US, not to mention it signals to them that you will schedule vacations and take them, things which, sadly, are sometimes frowned on in tech in the US. As your colleagues in SF whether they take all their vacation days each year!

The relocation package price is reasonable and having to pay it back in full in the first year if you leave is standard (although not if they terminate you without cause - you'd want them to clarify). When you mention wanting to change the terms you are indicating to them that you're not sure you want to stay. That's honest but it might not make them want to make exceptions for you.

I think if there's anything I'd want change it would be a guarantee in writing that they would apply for a greencard for you in one year, subject to job performance. They're right that you have to make peace with the insecurities of being on a visa, that's just the way it is.

I also think if you're not sure after three months it might not be the best move for you, but only you can decide that. Also it sounded like you might not be married yet; in case you aren't aware you will have to marry your girlfriend for her to come with you (in the future).

Good luck with your decision!

Cape Blue

(1). Dump the bird and go for it.

(2). If she's keeper, stay in the UK.