Employer Relocation Packages: How Home-Sale Help Works, and Is It Taxable?

Relocation packages differ from employer to employer, but home-sale help usually comes as payments toward your selling and moving costs, a program where a relocation company buys your home or helps you sell it, or both. For most employees, moving expense reimbursements are now taxable: the IRS says the exclusion for qualified moving expense reimbursements is permanently eliminated except for certain military and intelligence community moves.

I'm Dennis Mark Interdonato with The Dennis Mark Group at Keller Williams Realty Ocean Living. When a new job pulls someone out of Monmouth or Ocean County, the offer letter can arrive with a relocation package and a start date that doesn't care when the house sells. Here's what to ask your employer, what the IRS says, and how to protect the sale when the clock is running.

What should you ask about your relocation package?

Get the answers in writing from HR or the relocation company before you list:

• Is the benefit a lump sum, or reimbursement of specific costs?
• Which selling costs does it cover, and is there a cap?
• Is there a home purchase program, and how is the price set?
• Does the program have rules about how and with whom the home is listed, and what happens to the benefit if you sell on your own timeline?
• Is temporary housing included, and for how long?
• Does the employer add money to cover the tax on the benefits?

Those answers decide the order of everything else, including whether you sell, rent it out or keep it. Here's how to decide whether to sell or rent your New Jersey home after a new job.

Are relocation benefits taxable?

For most people, yes. IRS Publication 15-B for 2026, the employer's guide to fringe benefits, says current law "permanently eliminates the exclusion for qualified moving expense reimbursements" from an employee's income. The exclusion remains for a member of the U.S. Armed Forces on active duty who moves because of a permanent change of station under military orders, and Publication 15-B extends it to certain intelligence community employees and new appointees.

The deduction side follows the same line. IRS Topic 455 says members of the Armed Forces on active duty may be able to deduct unreimbursed moving expenses for a move under military orders, and that intelligence community employees and new appointees moving in 2026 or later may also be treated as members of the Armed Forces. If you're moving on military orders, my military and VA page covers that side.

How does the IRS treat an employer home purchase program?

It depends on how the program is built. The IRS walked through three examples in Revenue Ruling 2005-74:

• The relocation company buys your home. When the company, acting for your employer, unconditionally agrees to buy at the appraised price and takes on the taxes, insurance, upkeep and risk of the home at settlement, the IRS treats it as your sale to the employer. Your gain is treated as sale proceeds, not compensation, and the ruling reached the same result in a version with an amended value option.
• You find the buyer, and the company steps in. When the company's promise to pay a higher amended price depends on first signing a resale contract with the buyer you found, and you keep the right to approve or reject offers, the IRS treats it as one sale from you to that buyer. In that case, the costs your employer pays on the home are taxable compensation to you.

Ask the relocation company which structure your program uses, and take the paperwork to your tax professional before you sign.

Will you pay tax on the profit from your home?

Possibly not. Under IRS Publication 523, you can generally exclude up to $250,000 of gain on the sale of your main home, or up to $500,000 on some joint returns, if you owned and lived in it for at least 24 months of the five years before the sale.

New Jersey has its own closing-day rule if you've already moved out of state. The Division of Taxation says nonresident sellers must make an estimated Gross Income Tax payment at closing unless they qualify for an exemption: the gain multiplied by 10.75%, and not less than 2% of the total consideration in the deed. A seller who meets the federal principal residence rules can claim an exemption on Form GIT/REP-3. Your attorney handles which form applies. Here's more on what happens at closing when you sell and move out of New Jersey.

How do you get the most for the house when the start date won't move?

The first two weeks on the market set the price. A home that launches at the right number, ready to show, draws its strongest buyers while you still have time. One that sits gets more expensive every month you carry it from somewhere else.

• Know the number first. A market evaluation built from recent sales. Start with your home's value.
• Decide on updates fast. You get two plans from me: as-is, or a few targeted updates, with what each should bring.
• Don't be here if you can't. I coordinate the work at the house, and you get a written update at every milestone, so you know what happened, what's next and what to have ready.

How I plan around a change like this is on my life events page, and the Life Events Guide lays out the order of operations. Moving to the Jersey Shore instead? That's what my relocation page is for.

Frequently Asked Questions

Are moving expense reimbursements taxable in 2026?

For most employees, yes. IRS Publication 15-B for 2026 says the exclusion for qualified moving expense reimbursements is permanently eliminated, except for active-duty military moving under orders and certain intelligence community employees.

What is an amended value sale?

It's a relocation program where you find a buyer and the relocation company steps in at that price. Under Revenue Ruling 2005-74, if the company's promise depends on first signing with your buyer and you approve the offers, the IRS treats it as one sale, and employer-paid costs are compensation.

Do I pay New Jersey tax at closing if I've already moved?

Nonresident sellers generally make an estimated payment at closing, at least 2% of the consideration, unless an exemption applies, such as the principal residence exemption claimed on Form GIT/REP-3. Your attorney confirms which form applies.

Should I sell or rent my New Jersey home when I relocate for work?

It depends on your package, your equity and whether you want to be a long-distance landlord. Start with the package terms in writing and a market evaluation, then decide.

This is general information, not legal, tax or lending advice. Your tax professional and attorney advise on your own situation.

About the author

Dennis Mark Interdonato is a REALTOR® and Master CDRE® who leads The Dennis Mark Group at Keller Williams Realty Ocean Living in Point Pleasant, NJ, helping buyers and sellers throughout New Jersey make their next move, with Monmouth and Ocean County as home base. Read more about Dennis Mark.

Keep reading

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• New job in another state: sell or rent your New Jersey home?
• Have a question this didn't answer? Send it to Dennis Mark and it may become the next article.