Permanent Change of Station (PCS)
Relocation Income Tax (RIT) Allowance
NOTE: Travelers who had PCS entitlements (other than a RIT) issued in the previous calendar year may be required
to file a RIT claim.
When an employee relocates to another permanent duty station in conjunction with a PCS, the reimbursement amounts
received on settlement claims from the payment office must be reported as income to the Internal Revenue Service
(IRS) and may be taxed. Mandatory Federal Withholding Tax (FWT) and applicable Federal Insurance Contributions
Act (FICA) and Medicare taxes will be withheld from taxable entitlement on applicable vouchers. A PCS W-2, reflecting
entitlement (income) and taxes withheld, will be issued to the traveler, employee, for each calendar year that
entitlement is issued or in behalf (i.e., airline tickets). The traveler may also have to pay state and local taxes
applicable to the old and new permanent duty stations.
To offset this burden, the traveler should apply for a RIT allowance. The RIT allowance is designed to reimburse
the traveler for the substantial additional Federal, State, and local income taxes paid because of the PCS move.
The RIT Allowance is not automatic - Travelers must apply for it to get it.
Any PCS traveler to whom PCS entitlement, other than a RIT allowance, was issued in a previous calendar year (Note:
that previous year is known as Year 1), should apply for the RIT allowance.
Any trawler who received Withholding Tax Allowance (WTA) entitlement, must submit a RIT allowance claim the following
calendar year, since WTA entitlement is treated similar to an "advance" against the RIT allowance entitlement.
The computation of the RIT allowance claim includes reduction by the amount of the prior year WTA entitlement,
which may prove that the WTA payment issued the previous year was excessive, thus requiring collection from the
traveler.
Similarly, for travelers who receive WTA entitlement but do not file a RIT, the WTA is considered a debt of the
traveler and collection action will be initiated.
RIT allowance claims are to be received in the appropriate payment office within 120 days of the beginning of the
calendar year following the year of other PCS entitlement. The RIT allowance year is called Year 2. If the traveler
wishes to have the RIT allowance settled and a payment issued prior to filing their tax return, the RIT allowance
claim should be filed as soon as all W-2s from all sources have been received for the prior calendar year.
NOTE: A traveler may have more than one Year 1 and Year 2 if they have settlement vouchers paid in more than one
calendar year. Travelers may be entitled to more than one RIT allowance per travel order. For example, if the traveler
sells their residence at the old duty station within two years of reporting to the new duty station and, after
the sale, purchases a new residence, and subsequently files and is reimbursed taxable closing costs.
To file for the RIT allowance, complete and submit the following documents:
- Travel Voucher (DD Form 1351-2), signed and dated.
- Relocation Income Tax (RIT) Allowance Status Certification Form (original and two (2) copies).
- Three (3) copies of all W-2 forms for earned income for the year in which the traveler is paid PCS travel claim payments for which they are claiming RIT allowance (and spouse's if filing a joint return).
- Three (3) copies of the IRS Schedule SE from self- employment income, if applicable (and spouse's if filing a joint return).
- Three (3) copies of PCS travel orders (DD Form 1614), including all amendments.
- Note: Submit a separate claim for each PCS travel order (when multiple moves are involved) and for each year 1.
- If DFAS Columbus processed claim and issued a W-2 for any year, a RIT claim should be mailed to the following address for receipt no later than April 30, of the following year:
Defense Finance and Accounting Service
Columbus Center
DFAS-CO/LTTB
PO BOX 369015
Columbus, OH 43236-9015
If DFAS Columbus was not the paying office for PCS entitlements, please mail the RIT claim to the office that processed your PCS claims and issued a W-2 for the claims.
For more information regarding the filing of a RIT claim or other PCS entitlement, contact a travel customer service representative at 1-800-635-6043 or DSN 869-4986.
Information Courtesy of DFAS
