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  1. #1
    Join Date
    Jul 2015
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    4

    Default Contract to Repay Relocation Costs

    My husband took a job that he has been at for a year now. The job is okay, but we hate the area. We have children and I can't stand that they are growing up in a place with racism, crime, and narrow minded people. I have never seen anything like this after living all over the country. I didn't even realize this still existed anywhere. The schools are not the greatest either.
    So, when he took the job, he used $12,000 from a relocation package. This is a three year contract that decreases by 33% each year he works. However, with taxes ? The package somehow became $21,000. This part I don't understand. We are willing to stay one more year because school is starting soon here and I hate moving my kids in the middle of a school year. Job searches can take months too.
    So is there anyway out of the final year of the contract when the time comes? It will be approximately $7000, when he really only used $12,000 to begin with.
    Also, if this helps at all, the company was facing financial difficulties over this past year and my husband was told to collect 1 week of unemployment at two different times this past winter. Although, the company seems to be doing better now.
    We bought a house, but it's in a nice neighborhood and should be able to at least break even on that next summer.

  2. #2
    Join Date
    Sep 2005
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    Behind a Desk
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    98,846

    Default Re: Contract to Repay Relocation Costs

    If your husband needs a better understanding of his tax liabilities, he should speak with a tax professional.

  3. #3
    Join Date
    Jul 2015
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    4

    Default Re: Contract to Repay Relocation Costs

    My question was not about the taxes unless there happened to be actual advise there, but if there was a way out of the relocation expenses based on what I told you.

  4. #4
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Contract to Repay Relocation Costs

    Quote Quoting Omahamom3
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    My question was not about the taxes unless there happened to be actual advise there, but if there was a way out of the relocation expenses based on what I told you.
    I do have some. They obviously upped the relocation package to 21k in order to allow for taxes. That tells me that the relocation package was included in your husband's W2 as income. Therefore, if you did not take the moving expense deduction on your tax return that year, (I am assuming 2014) then you should amend your return to take that deduction.

    In addition, since the relocation package was included in income for that year, if your husband has to pay any of it back, it should be deducted from income on his W2. If it is not, then he can take a Schedule A deduction on your tax return for whatever year he pays it back.

  5. #5
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Contract to Repay Relocation Costs

    Quote Quoting Omahamom3
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    but if there was a way out of the relocation expenses based on what I told you.
    Probably not but we can't read his relocation contract from here.

    He should have it reviewed by an employment law attorney and learn his options.

    Bottom line, though, those contracts are enforceable and if he plans to quit a year ahead I suggest starting to put aside money now, to cover the $7000 when the time comes.

  6. #6
    Join Date
    Jul 2015
    Posts
    4

    Default Re: Contract to Repay Relocation Costs

    We did take a moving expense deduction. I will make sure that when he pays it back we take that deduction. Thanks for the advice!

    So, you don't think the two weeks of unemployment due to the company experiencing financial difficulty will void the contract? He collected unemployment during this time, so we do have proof.

  7. #7
    Join Date
    Mar 2013
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    18,340

    Default Re: Contract to Repay Relocation Costs

    Quote Quoting Omahamom3
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    So, you don't think the two weeks of unemployment due to the company experiencing financial difficulty will void the contract?
    Nope.

  8. #8
    Join Date
    Sep 2005
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    Behind a Desk
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    98,846

    Default Re: Contract to Repay Relocation Costs

    Quote Quoting Omahamom3
    View Post
    So, you don't think the two weeks of unemployment due to the company experiencing financial difficulty will void the contract? He collected unemployment during this time, so we do have proof.
    Had he resigned as a response to being laid off, he might have an argument. However, he understandably chose instead to continue the employment relationship.

  9. #9
    Join Date
    Jul 2015
    Posts
    4

    Default Relocation Contract

    His company is once again facing financial difficulties as it is connected to the oil industry. They asked him to step down as a supervisor and take a pay cut due to the financial problems. Much of the companies employees have now been laid off. He still needs a job while we are here (and in search of a new job), but was hoping to use this as an opportunity to get out of the relocation package. Since they are rewriting his contract as part of the demotion, can he ask them to exclude the repay of the relocation expenses? We are not hoping to move on and out of the area until next summer since our children are already a couple of months into the school year (year round). That would put him finishing year 2 of the 3 year contract.

    I asked him not to sign anything until we can look it over and possibly bring it to a lawyer to have them look at it. Just hoping to get some advice on if this is a good time to try to get his original relocation package removed from the contract that is not going to be what they originally offered in the first place? The new contract will be ready by the end of the week.
    If we bring the original and proposed contracts to a lawyer, what can we expect to pay?

  10. #10
    Join Date
    Dec 2009
    Location
    Lake Chapala
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    3,043

    Default Re: Relocation Contract

    You can ask them to remove the $7000 relocation expense amount owing, but they don't have to comply. And please note that unless the original contract specifies that they will not fire him no matter what, not for any reason, they will be within their legal rights to fire him for refusing to sign the new contract.

    Please also note that most contracts have language in them that states (in more words than here) that if one portion of the contract is breached by the employer, the remaining terms are still enforceable This is why we originally recommended you have an attorney review the contract in its entirety.

    Finally, I'm not sure what an attorney would charge to review both contracts and make recommendations. I would estimate around $500 but possibly as much as $1000. The other expert volunteers here might have a better idea on that.

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