What is actually in a package. The common components are a household goods move, including packing and storage; temporary housing at the destination for a stated number of days; one or more house-hunting trips; travel for the move itself; costs of breaking a lease; and, for a homeowner, some form of home-sale assistance, which at the more generous end can include buying the property or covering a loss on the sale. A miscellaneous allowance, a fixed sum meant to absorb the costs nobody enumerated, is common on top. Which of those appear, and at what level, is entirely a matter of the employer's policy and the individual negotiation; there is no floor, no standard package, and no legal entitlement to any of it.
How it is delivered changes the employee's exposure. A lump sum hands over a fixed amount and the risk: whatever the move costs above that figure is the employee's, and whatever is left over is theirs to keep. A managed program shifts the cost risk to the employer and the choice of vendor away from the employee. Reimbursement against receipts sits between the two and puts the timing risk on the employee, who pays first and is repaid later.
The tax treatment, which is the fact this page exists to carry. Section 132(a)(6) of the Internal Revenue Code once excluded a qualified moving expense reimbursement from an employee's income, and section 217 once allowed a deduction for moving expenses. Both are switched off. Section 132(g)(2) suspends the exclusion and section 217(k)(1) suspends the deduction, in each case "for any taxable year beginning after December 31, 2017." When those suspensions were enacted in 2017 they carried an end date of "and before January 1, 2026"; the 2025 tax law struck those words and changed the heading from "2018 through 2025" to "beginning after 2017." The suspension is therefore open-ended, and a source telling a reader that employer moving reimbursements become tax-free again after 2025 is describing law that was changed. The practical result is that a relocation package appears in Box 1 of the employee's Form W-2 and is subject to income tax withholding and payroll taxes like any other wages.
The two exceptions, stated exactly. Section 132(g)(2) preserves the exclusion for "a member of the Armed Forces of the United States on active duty who moves pursuant to a military order and incident to a permanent change of station," and, as amended in 2025, for "an employee or new appointee of the intelligence community" who moves pursuant to a change in assignment that requires relocation. Section 217 mirrors both. The IRS states in its own guidance on the subject that intelligence community employees and new appointees moving in 2026 or later may be treated as members of the Armed Forces for moving expense purposes. No other category of civilian employee has an exception.
The gross-up, and why the arithmetic is not what it looks like. Because the package is taxable, an employer who wants the employee to end up with a particular amount has to pay more than that amount and cover the tax on the excess as well. That additional payment is called a gross-up. A gross-up is itself taxable wages, which is what makes the calculation circular and why simply adding the tax rate to the intended figure falls short. Grossing up is a policy choice rather than an obligation, and a package that is not grossed up transfers the entire tax cost to the employee, which is the single largest difference between two otherwise identical offers.
The repayment agreement. Packages commonly come with an agreement requiring the employee to repay some or all of the benefit if they leave within a stated period, and the terms vary in ways that matter: what counts as leaving, whether resignation and dismissal are treated alike, whether the obligation reduces over the period or falls away all at once, and whether the amount repayable is the gross figure the employer paid or the net the employee received. Those two figures differ by the tax, and on a grossed-up package the difference is large. There is no standard practice to rely on and no source of record for one, so the agreement itself is the only authority on any of it.
What sits outside this page. The cost of moving when nobody else is paying, changing tax domicile, comparing living costs between two cities, selling a home, and the very different treatment of a military permanent change of station all have their own pages here.
