Sales taxes paid by Subcontractors should be detailed on the form "Reimbursable Sales and Use Tax Statement by Subcontractor" (see Appendix H).
Taxation of Reimbursement Federal income tax laws require most of the relocation expenses paid by an employer on behalf of an employee to be reported as income on the employee's W-2 (Wage and Tax Statement) for the year in which payment is made.
The employer must report the shortfall as wages on Form 941, Employer's Quarterly Federal Tax Return (and, if applicable, Form 941c, Supporting Statement to Correct Information) and Form W-2, Wage and Tax Statement (or, if applicable, Form W-2c, Corrected Wage and Tax Statement) in accordance with its treatment of the shortfall under paragraph (f)(2)(ii) (B) or (C) of this section.
The Employer will reimburse the Employee for all operating expenses relating thereto upon the Employees submission of appropriate documentation as set forth in Section 4.1. The Employer will determine the actual value, if any, of the Employees non-business use of such automobile and will furnish the Employee with a W-2 Wage and Tax Statement, grossed up for taxes, to be included in the Employees income tax returns, in accordance with prevailing Internal Revenue Service regulations.
A copy of the Pennsylvania Realty Transfer Tax Statement of Value may be submitted for this purpose.