Sponsors (12)
The bill makes relocation reimbursements tax-favored—benefiting relocating intelligence and federal employees and easing recruitment—while reducing federal revenue and creating modest administrative burdens that may shift costs elsewhere in the budget.
Intelligence community members and other federal employees who receive relocation reimbursements will keep more of those payments because qualifying moving reimbursements are excluded from taxable income and a moving-expense deduction is restored, lowering relocation costs and helping recruitment and retention.
Taxpayers and payroll administrators get certainty about timing because the changes apply prospectively to taxable years after enactment, giving a clear effective date for implementation.
All taxpayers face a fiscal cost because excluding reimbursements from taxable income will reduce federal tax receipts, potentially increasing the deficit or forcing cuts or offsets to other programs.
Middle-class families and other taxpayers could bear higher relative tax burdens if the narrowed tax base requires revenue offsets or shifts taxes onto others.
Employers, payroll departments, and federal agencies will face administrative and compliance costs to change payroll and tax withholding practices to implement the new exclusion and deduction rules.
Based on analysis of 2 sections of legislative text.
Restores a moving expense deduction and creates an exclusion for qualified moving reimbursements for intelligence community personnel, reducing taxable income.
Expands federal tax treatment for moving expenses for intelligence community personnel by restoring a moving expense deduction and adding an exclusion for qualified moving expense reimbursements. The change reduces taxable income for affected employees and reimbursed moves, and applies to taxable years beginning after enactment.
Official title: Amend the Internal Revenue Code of 1986 to expand the treatment of moving expenses to employees and new appointees in the intelligence community who move pursuant to a change in assignment that requires relocation, and for other purposes.
Introduced June 23, 2025 by Thomas Bryant Cotton · Last progress June 23, 2025