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Special Payments

Table of Contents
Employer-Provided Vehicles

Suppose an employer provides a vehicle an employee uses exclusively for business purposes, and the substantiation requirements are met. In that case, no tax consequences or reporting are required for that use. The use is treated as a working condition fringe benefit. Business use does not include commuting. Employees should maintain records to substantiate that all vehicle use was for business. 

Substantiated business use is not taxable to the employee if an employer-provided vehicle is used for business and personal purposes. Personal use is taxable to the employee as wages.

What is Personal

The following are examples of taxable personal use of an employer-provided vehicle:

  • Commuting between residence and workstation, vacation travel, non-business weekend use, or use by a spouse or dependents.

Personal use of an employer’s vehicle that does not qualify for an exclusion creates taxable wages for the employee. Three automobile valuation rules are: (1) Automobile Lease Valuation Rule. (2) Vehicle Cents-Per-Mile Rule or (3) Commuting Rule.

If you have an employer-provided vehicle, the Payroll Manager will help you determine your taxable reportable income.

Reportable Meals

Meal expenses not involving an overnight stay are generally not reimbursable. Reimbursement may be allowed if documentation supporting the reimbursement establishes that the meal was taken during overtime work. Review Travel Planning for additional information on Overtime Meals.

Reimbursements for Overtime Meals are taxable. The payroll office receives a copy of the employee Travel Expense Reimbursement Voucher (TERV). The Payro Office processes the entry in Banner to reflect the taxable income paid to the employee.

Moving & Relocation

For Moving and Relocation Stipend Payments made after January 1, 2019.

William & Mary may provide a moving and relocation stipend for a newly hired faculty or staff member to move from their former residence to the new residence. The university will process no additional moving and relocation reimbursement payments of any kind and will provide no additional budget to cover the cost of a relocation stipend and related fringe benefits.

Moving and Relocation Expenses include the following:

  • Expenses for house hunting
  • Expenses for the actual move from the old residence to the new residence
  • Hiring a Professional mover
  • Hiring a Do-It-Yourself Mover
  • Expenses for the selling of an old home
  • Expenses for the buying of a new home
  • Temporary Quarters

Payments for moving and relocation stipends must be funded from the university department’s budget for hiring employees. The amount of the stipend is negotiable between the hiring department and is subject to the unit’s budget availability. Per a provision in the Tax Cuts and Jobs Act, stipends will be fully taxable income and will be limited to one per household.

Language specifying the amount, terms, and conditions for the moving and relocation stipend is under the University Relocation Stipend Agreement (pdf).

A. Eligibility

For an employee to be eligible to receive a moving and relocation stipend, the following eligibility criteria must apply:

  • The distance between the employee’s work location and the former residence must be 50 miles greater than the distance between the employee’s work location and the former residence;
  • The employee must be hired into a full-time salaried position for at least one year (twelve consecutive months);
  • The relocation must be at the university’s request for the employee’s convenience.
B. Processing Stipend Payments

All moving and relocation stipend payments will be made to the employee through the payroll system within 60 days of the employee’s start date of employment. Therefore, employees must be added to the payroll system before the stipend can be processed.

The moving and relocation stipend will be reported as taxable income and included on the employment statement. Income tax will also be withheld on all payments. The tax amount withheld will be approximately 35.4 percent of the total taxable income -- this is based on the following rates:

  • 22.0 percent for Federal Income Taxes
  • 5.75 percent for State Income Taxes
  • 6.20 percent for Social Security
  • 1.45 percent for FICA Medicare
C. Pay-Back Provision

In the event the Employee does not remain employed by the university full-time for the entire appointment period or one calendar year if no appointment period is specified, the total gross amount of the stipend received by the employee must be refunded on a prorated basis within 30 days of their last day of employment with the university. 

For any other questions, please refer to the New Employees Relocation Stipend Policy or visit University Human Resources. 

University Relocation Stipend Agreement (pdf)

Deceased Pay

The method for handling federal taxation and reporting the payment of wages to an employee who has died depends on when the wages are paid in relation to the employee’s death and compliance with Code of Virginia 64.132.3 when there is no executor or administrator; when the gross amount is $25,000 or less, the agency must wait 60 days before processing the payment to any successor. You must contact the Assistant Attorney General for guidance if the amount due is more.

Wages Paid After Employee Dies (within the same year)

Wages paid to a deceased employee’s state executor/administrator after the employee dies but in the year of death are not subject to federal income tax withholding. However, they are subject to Social Security, Medicare, and Federal Unemployment Tax Act FUTA taxes. (Note: Virginia wages are exempt from FUTA taxes.) Therefore, the agency must report the Social Security and Medicare wages and the amounts withheld on the deceased employee’s W-2 form in Boxes 3 - 6. The amount of Federal and State taxable income will be reported only on a Form 1099 – MISC in the name of the executor/administrator or beneficiary.

Wages Paid After Employee Dies (after the year of death)

Wages paid to a deceased employee’s state executor/administrator after the year of the employee’s death are not subject to federal income tax withholding or Social Security, Medicare, or FUTA taxes. They will be reported only on Form 1099 - MISC in the name of the payment beneficiary.