Relocation benefits have not been treated as tax-free for the employee since the 2017 changes eliminated the moving expense deduction and exclusion for most workers, and every year since then has brought incremental adjustments that continue to reshape how companies structure and report these benefits. Heading into 2026, several developments are worth understanding clearly, both to stay compliant and to make sure relocation packages are actually delivering the value employees think they are getting once taxes are accounted for. The Baseline Most Companies Still Get Wrong Since moving expenses became taxable income to the employee, nearly every dollar of relocation assistance, whether it is a lump sum payment, a home

Few parts of a relocation package generate more employee pushback than the cost-of-living adjustment. An employee moving from a lower-cost city to a higher-cost one expects a meaningful bump in compensation to match, and when the number the company offers falls short of what the employee has already calculated on their own using an online cost calculator, the conversation gets tense fast. Getting this number right, and being able to explain how it was calculated, matters more to relocation program credibility than almost any other single policy element. Why Cost-of-Living Adjustments Are So Often Disputed? The core problem is that cost-of-living indices are not standardized. A company using one data