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Notes

41 C.F.R. §§ 302-17.62–302-17.67

6 sections in range

§302-17.62. Information to include on employee tax returns for Year 1 under the two-year process.

41 C.F.R. § 302-17.62

(a)
Agencies provide allowances to employees, reimburses employees for vouchers that they submit, and pays certain relocation vendors directly, all during the same calendar year, as described in subpart B of this part. Some of these reimbursements, allowances, and direct payments to vendors are taxable income to the employee. Agencies compute a WTA and report that withholding to the IRS for each of these that is taxable. This is Year 1 of the two-year process.
(b)
If an agency makes the WTA optional to the employee and they have chosen not to receive the WTA, then the agency computes withholding tax for each taxable reimbursement, allowance, and direct payment, and reports that withholding to the IRS.
(c)
Shortly after the end of the calendar year, agencies provide one or more W-2 forms to employees. At its discretion, an agency may include all of an employee's taxable relocation expenses and WTA (if any) in one W-2, along with the employee's regular payroll wages, or it may provide one W-2 for the regular payroll wages and a separate W-2 for the taxable relocation expenses and WTA (if any).
(d)
At approximately the same time as the agency provides the employee a W-2(s), it also may provide an itemized list of all relocation benefits and the WTA (if any) for each benefit. Employees should use this statement to verify that the agency has included all covered taxable items in its calculations and to check the agency's calculations.
(e)
Employees must submit all W-2s that they have received with their Year 1 tax returns. On those returns, employees must include all taxable relocation expenses during the previous year as income. Furthermore, employees must include the WTA (if any) as tax payments that the agency made for them during the previous year, in addition to the regular withholding of payroll taxes from their salary.
Notes, amendments, and revision history

Authority

Authority: 5 U.S.C. 5724b; 5 U.S.C. 5738; E.O. 11609, 36 FR 13747, 3 CFR, 1971-1975 Comp., p. 586.

Source

Source: FTR Case 2025-05, 90 FR 56893, Dec. 8, 2025, unless otherwise noted.

§302-17.63. Requirement to provide tax information to the agency to make the RITA calculation possible under the two-year process.

41 C.F.R. § 302-17.63

Employees must provide the information their agency requires to make the RITA calculation. This will include tax information for any Federal and State tax returns filed for the year that the employee received covered taxable relocation expenses. Employees must submit the “required tax information” in Year 2, along with their RITA claim, after they file their income tax return. If an agency pays any taxable expenses covered by the WTA in more than one year, then the employee will have to file a RITA claim each year. Agencies establish the deadline each year for filing of the RITA.
Notes, amendments, and revision history

Authority

Authority: 5 U.S.C. 5724b; 5 U.S.C. 5738; E.O. 11609, 36 FR 13747, 3 CFR, 1971-1975 Comp., p. 586.

Source

Source: FTR Case 2025-05, 90 FR 56893, Dec. 8, 2025, unless otherwise noted.

§302-17.64. Failure to provide required tax information to the agency.

41 C.F.R. § 302-17.64

The WTA is an advance on an employee's income tax expenses, thus if an employee does not provide the required tax information and file the RITA claim in a timely manner, the agency will require the employee to repay the entire amount of the withholding and WTA (if any) that the agency has paid.
Notes, amendments, and revision history

Authority

Authority: 5 U.S.C. 5724b; 5 U.S.C. 5738; E.O. 11609, 36 FR 13747, 3 CFR, 1971-1975 Comp., p. 586.

Source

Source: FTR Case 2025-05, 90 FR 56893, Dec. 8, 2025, unless otherwise noted.

§302-17.65. How to claim the RITA under the two-year process.

41 C.F.R. § 302-17.65

(a)
To claim the RITA under the two-year process, employees must file a RITA claim and provide the required tax information that the agency requests.
(b)
Agencies will calculate the actual RITA after the employee submits their RITA voucher and the required tax information. Employees should perform the RITA calculation for themselves, as a check on the agency's calculation, but they are not required to put the “right answer” on the voucher that is submitted to claim the RITA.
Notes, amendments, and revision history

Authority

Authority: 5 U.S.C. 5724b; 5 U.S.C. 5738; E.O. 11609, 36 FR 13747, 3 CFR, 1971-1975 Comp., p. 586.

Source

Source: FTR Case 2025-05, 90 FR 56893, Dec. 8, 2025, unless otherwise noted.

§302-17.66. RITA calculation methodology and procedures under the two-year process.

41 C.F.R. § 302-17.66

(a)
Agencies will calculate the RITA after receipt of the RITA voucher.
(b)
The RITA is itself taxable income to an employee. To account for taxes on the RITA, the agency will gross-up the RITA by applying the Combined Marginal Tax Rate (CMTR) to the final amount rather than the reimbursed amount.
(c)
Thus, the agency calculates the RITA by multiplying the CMTR (using the State and local tax tables most current at the time of the RITA calculation) by the total of all covered taxable relocation benefits during the applicable Year 1, and then subtracting any WTA(s) from the same Year 1 from that total. That is:
(d)
The RITA is likely to be different from the sum of the WTA(s) paid during Year 1, if any, because the WTA is calculated using a flat rate, established by the IRC, while the RITA is calculated using the CMTR. Therefore:
(1)
If the RITA calculation this section results in a negative value (that is, if the agency's calculation shows that it withheld and reported too much money as income taxes), then the agency will report this result to the employee and will send the employee a bill for the difference, to repay the excess amount that it sent to the IRS on the employee's behalf as withheld income taxes. The IRS will credit the employee for the full amount of withheld taxes, including the excess amount, on the income tax return for Year 1; therefore, employees must repay the excess amount to their agency within 90 days, or within a time period set by the agency. If an employee is required to repay an amount in Year 2 that was included as wages on the W-2 in Year 1, employees may be entitled to a miscellaneous itemized deduction on their Federal income tax return in Year 2.
(2)
If the RITA calculation in this section results in a positive value (that is, if the agency's calculation shows that it did not withhold enough money as income taxes), then the agency will pay the RITA before the end of Year 2 and will report it to the IRS as part of the employee's income for that year. Also, after the agency has paid the RITA, it will provide a W-2 that shows the RITA as taxable income.
(e)
At an agency's discretion, employees may receive one W-2 that includes all of their taxable relocation expenses, WTA (if any), and RITA (if any), along with their regular payroll wages, or employees may receive one W-2 for their regular payroll wages and a separate one for their taxable relocation expenses, WTA, and RITA.
Notes, amendments, and revision history

Authority

Authority: 5 U.S.C. 5724b; 5 U.S.C. 5738; E.O. 11609, 36 FR 13747, 3 CFR, 1971-1975 Comp., p. 586.

Source

Source: FTR Case 2025-05, 90 FR 56893, Dec. 8, 2025, unless otherwise noted.

§302-17.67. Reporting RITA and paying taxes on the RITA under the two-year process.

41 C.F.R. § 302-17.67

When income taxes are due for Year 2, employees must report the RITA, if any, as taxable income on their Federal, State, and local tax returns.
(a)
If an employee's relocation process results in only one Year 2, or if the previous year was the last Year 1, the RITA is the only amount that an employee reports as income resulting from their relocation for that Year 2.
(b)
If, on the other hand, an employee's relocation process results in more than one Year 2 (if, for example, the employee incurred relocation expenses during more than one calendar year), then, except for the last Year 2, the employee will need to report reimbursements, allowances, direct payments to vendors, and WTA(s), if any, for succeeding Year 1's at the same time that they report each Year 2's RITA.
Notes, amendments, and revision history

Authority

Authority: 5 U.S.C. 5724b; 5 U.S.C. 5738; E.O. 11609, 36 FR 13747, 3 CFR, 1971-1975 Comp., p. 586.

Source

Source: FTR Case 2025-05, 90 FR 56893, Dec. 8, 2025, unless otherwise noted.