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I recently had an interstate move for a job that passed the distance test. In the process of the move my household goods were delayed transit. Since the delay exceeded the allowable window, the moving company issued me compensation for the delay. How should this be treated for the purposes of itemizing my taxes?

Note that the compensation was issued as a check and not a discount to the actual bill for transit and there was no indication that a 1099-MISC or similar would be issued.

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    Without even thinking of claiming this is an authoritative answer, I'd consider it a discount. – RonJohn Jan 23 at 16:41
  • The deduction for moving expenses at the federal level changed with the 2018 tax changes, make sure you still qualify. Some states have other rules. – mhoran_psprep Jan 23 at 16:51
  • @RonJohn I've been going back on if it would be a discount or more like an insurance payment since I still had to pay the total bill (COD) and then the check arrived weeks later. – anonymous Jan 23 at 18:21
  • @mhoran_psprep This is state / local taxes, but the follow the pre-2018 tax changes. – anonymous Jan 23 at 18:22
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I would consider it a refund. Imagine the estimate was based on hours, weight, miles, gas, and tolls. You pay 1/2 when they pickup, and 1/2 when they drop off your stuff. Then a week later they send you a check because gas and tolls were less then they estimated. For tax purposes your expenses would be the net of all the payments and refunds. It wouldn't be part expense and part income. It wouldn't matter if they credited your credit card, sent you a check, or gave you cash.

The complexity would come in if the payments were in one calendar year, and refund was in the next year, and your taxes before receiving the refund. Though this should be handled via the tax instructions, because the old federal tax rules had a time requirement, that could cause reporting over two tax years.

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If you have the paperwork to support that the check is a discount (refund), then it is not income. Otherwise it looks like income.

  • Can you provide more details or cite relevant statute? As it is this is woefully unauthoritative. – anonymous Jan 24 at 15:35

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