“We’re hiring” signs are everywhere in Georgia. Georgia’s unemployment #s are very low, and there are twice as many jobs than there are seekers. One way to fill an open job is to hire from out of state. Who pays for the move? Employees are no longer allowed to deduct job-related moving expenses, (unless they are military). Employers will likely pay for the move, but there is a risk that the new hire doesn’t stay long enough to recoup the expenses. One way to mitigate is to have the new hire sign an agreement to pay the employer back for all moving costs if the employee isn’t with the employer through a specific date in the future. Loans under $10,000 can be made without a stated interest rate; for loans greater than $10,000, the Applicable Federal Rate (AFR) can be used. If the employee leaves, he owes the employer for the moving costs. If he doesn’t leave, the loan is forgiven. Please note, there is a tax consequence to both parties. The employee will have to recognize the forgiven income, and the employer can’t deduct the loan as an expense until it is forgiven. I’m Lynn Spencer with Killingsworth Spencer, “helping clients understand the choices that matter.”
