When moving a certain distance for employment (say moving across the country for a new job), one can deduct some of the moving expenses to lower their AGI. This is done by filling out IRS Form 3903, the total of which will be deducted from your AGI when you fill out form 1040.
In the form, you list expenses related to transportation of household goods and personal effects, costs of travel, etc. Then, in line 4, it asks for how much money you received from your employer to cover those expenses:
Enter the total amount your employer paid you for the expenses listed on lines 1 and 2 that is not included in box 1 of your Form W-2 (wages). This amount should be shown in box 12 of your Form W-2 with code P.
My question is: what exact payments from your employer should be entered here? I realize that you can just write the number you get in box 12 with code P on your W-2, but I'm curious how they come up with this number.
For example, for my employer I received a signing bonus, and a "relocation lump sum" separate from that signing bonus. The relocation lump sum is taxed and will appear as income on my W-2, and I can spend it on anything I want. That said, should the relocation lump sum count towards the entry quoted above in Form 3903, or would it be considered the same as any other bonus; thus allowing me to take a full deduction for all of my deductible travel expenses?