Group Move Relocation Policy Toyota Group Move Relocation Policy. TEMA Team Members Grades 10 & 20 TMS Team Member Bands 1 & 2 TMA Assistant Staff

Transcription

1 Group Move Relocation Policy Relocation Policy TEMA Team Members Grades 10 & 20 TMS Team Member Bands 1 & 2 TMA Assistant Staff February 1, 2017

2 Policy Component Introduction... 1 Benefits at a Glance... 2 Before You Get Started... 4 Expense Management... 7 Time off for Trips... 8 Lump Sum... 9 Movement of Household Goods Tax Liability Assistance Appendix

3 Congratulations! Congratulations on your relocation with Toyota! This Group Move policy has been created to encourage all team members to join us on this journey. On behalf of the Company, we want to thank you for your willingness to make this change. We hope that it will lead to personal growth and further career development, and prove to be mutually beneficial. Our intent is to provide our mobile team members and their families with the tools and assistance to help them relocate in a timely and cost-effective manner. We recognize and respect the diversity of our team members and strive to respond to their unique situations, while ensuring fairness and consistency. We will adhere to Company policy and legal regulations, and we will treat all team members in an ethical manner. It is our shared responsibility to communicate openly and honestly and to cooperate with one another to ensure the highest level of motivation, morale and productivity during the relocation process. Furthermore, we are committed to ensuring that our service partners meet our requirements for efficient, customer-oriented service delivery. This Relocation Policy is designed to provide information to make your move as smooth and easy as possible. Please read this material carefully so that you understand the assistance available to you. Toyota has selected a relocation management company to assist in your transition. The relocation provider is a globally recognized firm that specializes in assisting corporations and their transferring team members in the relocation process. Once your relocation authorization has been received by the relocation provider, you will receive an that will include instructions to register with the relocation provider s online relocation tool. Once registered, you will automatically be logged into your personal online relocation portal. You will use this portal to access and complete information required to finalize the authorization process with the relocation provider. After you have completed the information in the online relocation tool, you will be contacted by the relocation provider to schedule an appointment to discuss your relocation benefits. The relocation provider provides a web site that offers helpful tools and resources to guide you through the relocation process. It is also used for submitting your expenses for reimbursement through the relocation provider. Page 1

4 BENFITS AT A GLANCE Below are the highlights of the Group Move benefits for. For additional information and details, please refer to the body of this Relocation Policy. Policy Component Description Pre-Decision Services To assist you in making your relocation decision, Toyota provides the following pre-decision services: Cost-of-Living Analysis - overview of cost-of-living analysis (COLA) for pre- and post-move locations Pre-Decision Counseling - review of all relevant policy information and guidance Tax Impact - overview of tax treatment of each individual relocation cost - review of potential impact to taxable earnings, as well as potential tax bracket changes - EY helpline ( ) to assist in answering your individual questions - information to provide to your chosen tax professional for a more in-depth assessment of your personal financial situation Discard and Donate Toyota will provide a special service to help you discard and donate some of your unused household goods and personal items Movement of Household Goods OR Toyota, through the Relocation Provider, will arrange for the movement of your household goods with a professional van line. The van line will pack, load, transport, and unload goods, including normal appliance servicing. Additional services include: - Partial unpacking services - Storage for up to 60 days or Self Storage Option - Shipment of up to one personal/toyota lease vehicle per licensed driver if the distance to the destination location is greater than 200 miles Self-Move Option Alternatively, Toyota also provides you the option to move yourself: You are required to sign the Self-Move Liability Waiver before starting the process. You will need to pay the expenses out of pocket and then seek reimbursement. Expenses covered in the self-move option are: - Direct reimbursement of actual, reasonable, and customary rental fee for one moving truck, tolls and gas Note: - No packing, loading and unloading services will be reimbursed - No storage or auto shipment will be provided Additionally, you ll receive a $2,500 self-move bonus (tax-assisted). - The total costs of the self-move, however, including the bonus, may not exceed the cost of a van line move. Page 2

5 BENFITS AT A GLANCE Policy Component Description Tax Liability Assistance Unless otherwise indicated in this Policy, Toyota will assist with federal, state, local and FICA tax liability (gross-up) that arises from the taxable, but generally not deductible, portion of Company-reimbursed expenses associated with a Company-requested relocation. The estimated tax liability will take into consideration your marital status and your Company earned income (annual salary). Tax assistance is not meant to reimburse dollar-for-dollar on the resulting tax liability, but to provide for a tax assistance amount on most of your non-deductible relocation expenses. You are encouraged to seek advice from your personal tax advisor. Repayment Team member will be required to sign a repayment agreement before any services can be provided. Team member will be required to repay all relocation expenses incurred by Toyota, including gross-ups, on a prorated basis should the team member leave the company within two years of effective date in the new work location or not relocate ½ the distance closer to the destination location. Eligibility Dates Team member will have up to 12 months from effective date in new work location as specified by Toyota to initiate and complete move. Relocation Assistance Payment $15,000 Lump sum payment to assist with relocation expenses. Non-tax assisted. Must meet all eligibility requirements as outlined on pages 4-5 to receive this payment. Please note this is only a summary of benefits. Please see body of policy for full details. Toyota reserves the right to modify or terminate the relocation benefits at any time at Toyota s sole discretion. Page 3

6 BEFORE YOU GET STARTED Objective Toyota s relocation benefits are intended to: Facilitate your timely transition to the destination location Minimize your out-of-pocket expenses while effectively managing Toyota s costs Comply with Internal Revenue Service (IRS) regulations Scope of Benefits These benefits are designed for the sole purpose of providing support for the Toyota Group Move relocations. This policy does not apply to standard relocations not impacted by the Group Move. This Policy describes the provisions of Toyota s policy effective with approvals granted as of April 28, Program Administration Toyota will authorize your relocation with the relocation provider. Your Relocation Consultant will assist you throughout your transition and will answer any relocation questions that you may have. During the relocation process, you must act and make decisions that are both prudent and reasonable in nature. Definitions Timeframe As per IRS guidelines, unless otherwise stated in this Policy, you have 12 months after the effective start date in your new position in your new location to process your relocation benefits and request reimbursement. Distance and Time Requirements This Policy is subject to current federal statutes regarding move distance requirements related to eligibility for tax deduction. The distance, over the shortest, most commonly traveled route from the former residence to the new work location must be 50 miles greater than the distance from the former residence to the former work location. Team members new primary residence must be at least half the distance closer to the destination work location from the departure residence. For team members whose moves do not meet this guideline, please see additional information in the Appendix. If the commute is considered a normal commute for others residing in the same general area, you may not be eligible for relocation even though the added distance may meet the 50-mile additional distance requirement. Furthermore, in moves within the same metropolitan area, should your move meet the distance requirement and you choose to relocate, the new commute may not be greater than the old commute. In order for a taxpayer s eligible moving expenses to be deductible, an individual must meet both the distance requirement and be employed full time in the general location of the new job location for at least 39 weeks in the 12-month period immediately following the start of work in the new location. If you terminate employment before the 39-week period is concluded, any advances and expenses paid on your behalf or reimbursed to you are considered income and will be reported as such to the IRS unless they are repaid to Toyota within the same calendar year. Should you terminate employment within the 39-week period, there will be no remaining gross-ups for any relocation benefits provided under this Policy. Page 4

7 BEFORE YOU GET STARTED IRS Commencement of Work Test In general, the move must have been in connection with the commencement of work at the new location, and the moving expenses must be incurred within one year after the effective date in your new work location. Eligibility If a team member accepted a job offer or was in a job on or before April 28, 2014, he or she will be eligible for the policy. If a team member accepted a job offer after April 28, 2014, he or she will be eligible for the policy. Group Move benefits will apply to the relocation to the final group move destination. If a team member transfers from a non-impacted position to an impacted position or from one impacted position to another impacted position after April 28, 2014, he or she will be eligible for the policy. Group Move benefits will apply to the final group move destination. If a team member transfers from an impacted position to a non-impacted position after April 28, 2014, he or she will be eligible for the standard relocation policy (provided all IRS relocation eligibility requirements are met). Family Eligibility When family members are entitled to relocation benefits within this Policy, the following will apply in determining eligibility: Determination of family size/status for benefit calculations is determined on the date the relocation provider receives your relocation authorization from Toyota. If Toyota employs both you and your spouse/domestic partner, only one set of benefits per household will apply. Repayment obligations of relocation benefits will be the responsibility of the team member whose benefits have been selected and applied to the relocation. Please see the definition of dependents in the Appendix. Eligibility Dates Provided your relocation has been authorized with the relocation management company, your relocation benefits may begin up to six months prior to the effective start date in your new work location. Your relocation benefits must be completed within 12 months of your effective start date in your new work location. Relocation benefits may begin up to six months prior to the effective transfer date to your new location and must be completed within 12 months of the effective date in the new work location. Benefits cease upon termination of employment. Page 5

8 BEFORE YOU GET STARTED Exceptions All inquiries regarding the Policy should be directed to the OneToyotaHub ( TFS Next Chapter ( or the teams in the Move Centers. Specific requests for exceptions to the Policy must be submitted in writing to your Relocation Consultant before the expense is incurred for consideration. All exceptions require the final approval of the Toyota Relocation Team before a commitment can be made. Failure to follow this process may result in personal expense or inconvenience to you. To implement a consistent Policy, there will be no substitution or cash-equivalent payments provided for unused benefits or portions thereof. Post-Move Surveys After your relocation is complete, you will receive post-move surveys from the relocation provider and other vendors that assisted with your move. Surveys, which may be done via telephone, or regular mail, are very important tools to ensure the programs and providers are meeting with Toyota s expectations. Toyota will receive a copy of these evaluations in order to assess the services provided to you. Your participation in the surveys is very important, and Toyota requests that you be candid in your assessment and complete all surveys as quickly as possible. Repayment Agreement We consider the team members we relocate to be valuable assets to Toyota and the relocation expense to be an investment. Therefore, at the time you require relocation assistance, we will require that you sign a Repayment Agreement indicating that you understand the limitations of the relocation benefits and your obligation to repay these expenses should you leave Toyota in the stated time. If you choose to leave Toyota within 24 months from your effective date in your new work location, fail to move ½ the distance closer to your new work location, or terminate employment for any reason (whether voluntary or involuntary) prior to the expiration of the 24-month period, relocation benefits will cease immediately, and you must repay all relocation benefits, including movement of household goods, pro-rata previously reimbursed or paid by Toyota. However, neither termination due to your death or total disability (as defined in the Toyota Long Term Disability Plan) nor termination in the event of job elimination, will trigger the repayment requirement. The Repayment Agreement must be signed and returned to Toyota prior to the authorization of any relocation benefits. Disclaimer Toyota reserves the right to amend, modify, suspend or terminate the relocation benefits and programs described at any time without advance notice. Toyota retains the right to establish separate relocation policies and/or benefit packages in the event of unusual or uncommon circumstances. Toyota will have the final right of decision when interpreting the terms of the relocation benefits and programs or in any communication with you. This Policy is not an offer, an employment contract, or part of either. Page 6

9 EXPENSE MANAGEMENT Expense Management Process Toyota will assist with relocation expenses in the following ways: Pay service providers directly for the relocation assistance that you receive Reimburse you for acceptable expenses that you have previously paid (self-move provision) Eligible expense reimbursements for the self-move provision should be submitted through the relocation provider s web site. Your Relocation Consultant will provide additional instructions regarding the use of this site. After the relocation provider receives the submission, the expenses will be checked for accuracy and consistency with Toyota s Policy. Under no circumstances should relocation expenses be submitted through the normal business expense process. Funds will be deposited directly to an account (through ACH) designated by you unless you notify your Relocation Consultant of an alternate payment process. Self-Move expenses must be submitted within 12 months of the effective date in the new work location. If at any time you are unsure whether or not an expense is reasonable in nature, appropriate, and/or eligible for reimbursement under this Policy, you should contact the relocation provider prior to incurring the expense. Provisions It is important to remember: You must not book your travel through BCD Travel. All travel arrangements should be made through non-toyota travel sites. Relocation expenses must be separate and distinct from business expenses. During the period in which relocation expenses are incurred, regular business (travel and entertainment) must not be reported with relocation expenses. You must submit those expenses through the normal business expense process. You must complete the expense process, taking care to include a complete address/location. Omission of this data can slow your reimbursement. Credit card statements cannot be used in lieu of receipts. You should keep records and receipts of all your expenses, whether they are reimbursable under this Policy or not, as this will assist in the completion of your federal and state tax returns at year-end. Use of Toyota s expense-reporting system is strictly prohibited for relocation expenses that are covered in this policy. If you utilize such system, this will result in Toyota paying additional amounts for certain expenses, which should be covered. In the event of any such occurrence, your actions will be reviewed for possible disciplinary action, up to and including job termination. In addition, you will be required to provide full restitution for such amounts, as determined by Toyota.. Page 7

10 TIME OFF FOR TRIPS Home Finding Trip Three paid days off from work will be granted to the team member in order to allow time to search for a home in the new location. Time off must be coordinated by your management team. Please refer to the Appendix for instructions on how to code your time. Final Move Trip to the Destination Location Five paid days off from work will be granted to the team member in order to allow time for the move. Time off must be coordinated by your management team and must be used within your authorization period. Please refer to the Appendix for instructions on how to code your time. Booking Travel All travel arrangements should be made through non-toyota travel sites. You must not book your travel through BCD Travel. Page 8

11 LUMP SUM Lump Sum Since everyone s needs and situations are not the same, Toyota will provide you with a lump sum payment of $15,000 (less taxes) to give you flexibility in spending relocation dollars. Since you will be receiving a lump sum payment, you will not have to complete expense reimbursement forms, submit receipts for reimbursements, or wait for reimbursements of expenses that you have already paid. How you spend your lump sum is up to you and your family. If you have money left over after the relocation-related expenses have been paid, it will be yours to keep! Your Relocation Counselor will take you through the various steps involved in relocating, and help you determine how best to allocate your lump sum dollars You must move half the distance closer to your new work location to qualify for this payment. Page 9

12 MOVEMENT OF HOUSEHOLD GOODS Household Goods Movement Benefit Description Discard and Donate Service Toyota will provide, through the relocation provider, a moving company to assist you with the movement of household goods. The relocation provider will select the van line and will coordinate the details. The moving company selected will: Provide all required packing materials Crate and uncrate necessary household items as recommended by the movers Perform normal appliance servicing at origin and destination locations Perform all packing, loading, transporting, and unloading Provide partial unpacking services Remove debris upon completion of the move (includes one pickup by the carrier of all cartons unpacked by you within 30 days of delivery); make sure during any unpacking that you inspect every carton and all packaging material so that no item is accidentally discarded. Special arrangements for shipping antiques or other items of extreme value must be approved in advance and supporting documentation such as insurance appraisals is required for verification. One household goods shipment will be provided from one origin location to one final destination location in the new work location. A split delivery to a temporary housing location and a storage facility in the destination location is permitted; however, only one delivery from the storage facility to the final destination is provided. Shipment from the team member s temporary location to the final destination is the responsibility of the team member. Toyota will provide an outsourced special service to help you discard and donate some of your unused household goods and personal items. Not only will the service reduce the cost to move your goods to the destination location, it will also help maximize your tax deductions and help charitable organizations in the process. The service includes: In-home consultation to help you with decisions on which items not to move. Separating and packing of items that are going to be discarded or sold. Making all the arrangements for items to be discarded or sold, on your behalf. Making arrangements with local charitable organizations for pick-up of donated goods. Preparing a list of items that were sold, discarded or donated to charity. Giving you a list of items that were donated for your personal tax return. Making arrangements with local consignment companies for items to be sold. Page 10

13 MOVEMENT OF HOUSEHOLD GOODS Excluded Items, Services and Costs Excluded Items, Services and Costs Toyota will not cover the cost to move certain items. This list includes, but is not limited to: Aerosol products, flammable or hazardous materials Antique, classic, project, or collectible automobiles Any items requiring excessive or special van accommodations (i.e., ATVs, jet skis, airplanes, camping trailers, golf carts, etc.) Boats (14 feet in length or longer) Car lifts, engines, or other large mechanical equipment Farm equipment or trailers Firewood, logs, patio blocks or other construction materials Frozen foods or other perishables Furs, jewelry, money, personal papers, records, tickets, securities or legal documents Liquors or carbonated beverages Pets and pet runs Plants Stamps, coins or other valuable collections (i.e., wine, etc.) Yard items that are large and require additional labor for dismantling and re-assembly (i.e., swimming pools, spas/hot tubs, storage sheds, satellite antennas, etc.) Furnishings from a second/vacation home Firearms, ammunition, hunting equipment, and safes in excess of 750 lbs. In addition to the above list, Toyota will not cover the cost of certain services and extra charges. This list includes, but is not limited to: Toyota will not cover the cost to move certain items. This list includes, but is not limited to: Aerosol products, flammable or hazardous materials Antique, classic, or collectible automobiles Any items requiring excessive or special van accommodations (i.e., ATVs, jet skis, airplanes, camping trailers, golf carts etc.) Boats (14 feet in length or longer) Farm equipment or trailers Firewood, logs, patio blocks or other construction materials Frozen foods or other perishables Furs, jewelry, money, personal papers, records, tickets, securities or legal documents Liquors or carbonated beverages Pets and pet runs Plants Stamps, coins or other valuable collections (i.e., wine, etc.) Yard items that are large and require additional labor for dismantling and re-assembly (i.e., swimming pools, spas/hot tubs, storage sheds, satellite antennas, etc.) Furnishings from a second/vacation home Firearms, ammunition, hunting equipment, and safes in excess of 750 lbs. In addition to the above list, Toyota will not cover the cost of certain services and extra charges. This list includes, but is not limited to: Page 11

14 MOVEMENT OF HOUSEHOLD GOODS Cost of appraisals on your goods Disassembly/reassembly of exercise equipment and large yard items such as swing sets; removal/reinstallation of yard items secured in cement Draining of waterbeds Exclusive use of the van or expedited service Housecleaning, maid service or janitorial services at either your new or departure location Overtime charges for weekend or holiday moves Removal or installation of draperies, wall-to-wall carpeting or related items Restocking of freezer Movement of items related to secondary businesses Tips to the moving crew Valuation Replacement value protection is provided through the selected moving company. Any item(s) lost or damaged while in the carrier s custody will be either repaired or replaced with a similar kind or the carrier will pay the replacement value of such item(s). The maximum liability for loss or damage is $125,000 (does not include automobiles). If this amount of coverage is not adequate, additional coverage may be purchased by contacting the moving company. Pre-Move Survey Prior to the start of packing, the moving company representative will complete a survey, by phone or in person, of those household goods you will be moving. This survey is used to determine what services, materials and equipment will be required to complete your move. If, after the survey has been completed, you decide to move additional items of significant size or weight, you must notify the moving company representative so that the proper materials are available and proper space is allocated on the moving van. Full Packing and Partial Unpacking of Goods Toyota will cover a full pack of your household goods unless you have elected the self-move option. Please allow the movers to pack all of your goods. However, if you must pack some of your goods, leave the box open so it can be inspected by the movers. The movers will need to either inspect or repack self-packed items to ensure they will be covered by valuation. Toyota will cover a partial unpacking service, which includes: Unload the moving van and place furniture and boxes in specific rooms in the home per your instructions Unpack mattresses and assemble beds Unpack dresser mirrors and similar items and reassemble Reassemble any item disassembled by the mover to facilitate transportation. Exceptions include any item needing professional expertise to reassemble, such as a slate pool table, major appliances, etc. Remove any cartons and debris from items you or mover unpacked on the day of delivery You will be asked to check items off the mover s inventory to ensure all items arrived. Items can be repositioned upon request. Page 12

15 MOVEMENT OF HOUSEHOLD GOODS Inventory List Read the inventory list prepared by the movers very carefully before you sign the document. You will want to be sure it is accurate and includes all goods intended for shipment. When your goods arrive, you or a responsible family member must be present to check off every item brought into your home. Damaged Goods Self-Storage Option If you discover any damage to your goods, set the damaged goods and container aside and immediately notify your Relocation Consultant for directions on how to file a claim. The moving company will provide you with the proper claim forms and procedures. Cost consideration is not given for sentimental value you may have for your item(s). In the event that you elect to utilize a self-storage facility in lieu of van line provided storage you will be provided a $750 payment towards your storage costs. Delivery into self-storage constitutes final delivery of your van line shipment. The team member will be responsible for all costs associated with delivery from self-storage. This benefit may not be utilized if you elect the self-move option. You will additionally be required to sign a self-storage waiver acknowledging release of liability to Toyota, the Relocation Provider, and the van line. Storage In-Transit If you must vacate your previous residence before you have procured permanent housing at the new location, Toyota will pay for storage costs of household goods for up to 60 days. Storage costs are calculated on a daily basis. If you should incur additional storage costs beyond 60 days, you will be billed directly for those expenses. Although storage is provided, Toyota recommends that you attempt to coordinate the shipment to be transported directly from your former home to your new home to avoid excessive handling of your household goods. Toyota does not cover the cost of accessing items that have been placed in storage and will pay to move the goods to your new home one time only. Your mover will designate an agent to arrange storage of your goods. Make sure you obtain the name, address and telephone number of the warehouse where your goods will be stored. The costs of damage to your goods due to acts of nature (hurricanes, tornados, etc.) are not covered. Page 13

16 MOVEMENT OF HOUSEHOLD GOODS Automobiles Reimbursement Process Toyota will provide, through the Relocation Provider, the shipment of up to one vehicle per licensed driver if the distance to the destination location is greater than 200 miles. The licensed driver must be a member of your household, your dependent as outlined in the Appendix, and moving with you. The automobiles must be operable, and their value must exceed the cost of shipping. Insurance coverage will be provided on your automobiles. If the mile restriction is met, one automobile may be shipped in advance for use during the temporary housing period. The assistance does not apply to antique, classic, project, or collectible automobiles. If the distance is less than 200 miles or you choose to drive to the destination location, Toyota will reimburse mileage based on the current IRS business rate for team member owned/leased vehicles and the IRS relocation rate for TMS lease vehicles. Toyota covers up to one personal/toyota lease vehicle per licensed driver, whether by shipping (if eligible) or mileage reimbursement, or a combination of the two. In order to be eligible for insurance coverage, do not pack any personal/household goods items in an automobile(s) to be shipped. The cost of moving household goods from your former residence to your new home will be paid directly by Toyota on your behalf. Tax Impact The cost to move your household goods and up to 30 days of storage is not taxable; therefore tax assistance (gross-up) does not apply. Toyota will provide tax assistance (gross-up) on any additional days of storage provided. See the Tax Liability Assistance section for additional information. Household Goods Movement Self-Move Option Toyota also provides you the option to move yourself. When taking this option, you will be required to sign a Self-Move Liability Waiver before starting the process of your move. Additionally, you will need to pay the expenses out of your pocket and then seek reimbursement. Expenses covered in the self-move option are: Direct reimbursement of actual, reasonable, and customary rental fee for one moving truck, trailer hitch (if needed), tolls, and gas No packing, loading and unloading services will be reimbursed. No storage or auto shipment services will be provided or reimbursed. Additionally, you ll receive a $2,500 self-move bonus (tax-assisted). However, the total cost of the self-move, including the bonus, may not exceed the cost of a van line move. Cost of boxes, packing materials and supplies are included in the bonus amount. Page 14

17 TAX LIABILITY ASSISTANCE Benefit Description The Internal Revenue Service (IRS) considers all relocation reimbursements made by Toyota to you or on your behalf compensation for services and will be taxable income to you. If the IRS criteria for moving has been met, the cost for the shipment of household goods, storage-intransit for up to 30 days, and travel to the new location (excluding meals and mileage over the IRS excludable rate) will be considered moving expenses and therefore excludable from your W-2 income. Taxable relocation reimbursements or payments made on your behalf will be included in your income for the year in which the payment was made or recorded. Therefore, if some of your expenses carry over into the following year, those expenses will be included in your W-2 income the following year. Generally, reimbursements processed in October will be recorded in the following calendar year due to reporting timing restraints. You are solely responsible for maintaining all records and receipts necessary to claim allowable federal (and where applicable, state and local) income tax deductions. Internal Revenue Service Regulations Definition of Moving Expenses The Revenue Reconciliation Act of 1993 resulted in a number of changes in how moving expenses are to be treated and which of those expenses will continue to be tax deductible. To begin with, the following criteria must be met: The commute from your departure residence to the new work place must be at least 50 miles farther than the commute from your departure residence to the old place of work by the shortest, most commonly traveled route. For team members whose moves do not meet this guideline, please discuss with your Relocation Consultant. You must be employed full time for 39 weeks. The 39 weeks must occur during a 12- month period that begins when you arrive at the new location. This requirement is waived in case of death, disability, involuntary termination or retransfer at Toyota s request. Except for some circumstances that involve your ability to move your family to the new location, the requirement calls for expenses to be incurred within one year of arrival in the general area of the new job location. Any expense that you incur must be reasonable in nature to be deductible. Expenses that are excessive will not be deductible. The move itself must be related to either continuing work at a new job location or starting a new job at a new location. After the above criteria have been met, the IRS recognizes the following as moving expenses : Costs related to the movement of household goods and personal effects from the former residence to the new residence Payment of these moving expenses, either directly or through reimbursement from Toyota, will be excluded from your reported income. Tax Gross-up Unless otherwise indicated in this Policy, Toyota will assist with federal, state, local and FICA tax liability (gross-up) that arises from the taxable, but generally not deductible, portion of Company-reimbursed expenses associated with a Company-requested relocation. Page 15

18 TAX LIABILITY ASSISTANCE The estimated tax liability will take into consideration your marital status and your Company earned income (annual salary). The amount of tax gross-up will be remitted by Toyota directly to the appropriate revenue agency and reported as withheld taxes on your W-2 Wage and Tax Statement. The determination of whether an item is or is not deductible by you on your individual income tax return is a personal decision you must make. The way that an item is treated by Toyota for purposes of income tax withholding does not constitute tax advice, and you should consult a personal tax advisor. Note: Taxable expenses are those that are considered taxable income and therefore included in your income and subject to Federal, State, FICA, Medicare and Local taxes. Deductible expenses are those that are included in your taxable income for which you are entitled to claim a federal or state tax deduction. Excludable expenses are those moving expenses or reimbursements that the IRS considers non-taxable. These amounts are not included in your taxable income. Gross-Up Table The chart below indicates which relocation expenses are excludable from your W-2 income if IRS criteria are met. If the expense is taxable and therefore will appear as income on your W-2, the chart indicates if Toyota will provide tax assistance (gross-up) on the expense. Policy Component Movement of Household Goods: - Van line services - Valuation - Storage of household goods up to 30 days - Storage of household goods after 30 days - Automobile(s) Excludable Yes Yes Yes No Yes Tax Assisted (Grossed-up) N/A N/A N/A Yes N/A Information on taxability or non-taxability of specific moving expenses can be obtained from your tax advisor or by reading IRS Publication 521 (Moving Expenses) or Publication 523 (Tax Information on Selling Your Home). These booklets can be obtained by contacting the IRS at TAX-FORM, or logging into their website at Only your Toyota base salary on the Personnel Action Form effective date of the relocation is used to calculate the tax gross-up, as well as Federal, State, Social Security and OASDI taxes. Although this is a generous tax assistance policy, this policy is not meant to reimburse dollar-for-dollar on the resulting tax liability, but to provide for a tax assistance amount on most of your non-deductible relocation expenses. The tax effects of relocation transactions can only be determined on an individual basis. For instance, your total family, bonus or spousal income may affect your tax bracket and, consequently, the taxes due on reimbursed relocation expenses. In addition, because each dollar of gross-up is considered additional income, there is a continued tax obligation on the tax reimbursement. Furthermore, any additional taxes owed or any tax deductions that become unavailable due to relocation reimbursement that cause the team member to move into a different tax bracket will not be paid by the Company. These tax liabilities or benefits will be an obligation or benefit to the team member. Page 16

19 APPENDIX Definition of Dependents: Your "dependents" who are eligible for the relocation policies must reside in the team member s household within the United States, Puerto Rico, or Canada and include: Your legal spouse or same-gender domestic partner; Your or your same-gender domestic partner's eligible dependent children up to age 26; and Your or your same-gender domestic partner's unmarried children of any age who are fully disabled. To be fully disabled your dependent child must be mentally or physically disabled and incapable of self-support. Qualified as dependents as defined under Toyota Benefits Policies Important! If requested, you must provide supporting documentation (e.g., a marriage license or birth certificate) for each dependent. Determination of family size/status for benefit calculations is determined on the date the relocation management company receives authorization from Toyota Distance Eligibility within IRS 50 mile regulation (Work locations Erlanger, Kentucky to Georgetown, Kentucky) For this Group Move policy, Toyota has taken the unique stance of including moves that may not meet the standard definition for eligibility according to the IRS regulations. This means relocation benefits will be provided to these team members, although the relocations will be taxed differently, because they do not meet the IRS distance test. In these cases, any benefits that would have been non-taxable (if the distance test was met), will be taxable. The taxes for these benefits will be paid by Toyota and grossed-up for the Team Member. Eligibility and benefits levels will be provided based on the following: TEMA Team Member s Permanent/Home Location TEMA at Georgetown TEMA at NAMC TEMA at Erlanger: TMs whose commute will not increase with move to Georgetown (e.g., live in Lexington) TEMA at Erlanger on assignment in Georgetown with no increase in commute (e.g., currently reside in Lexington, Dry Ridge, etc.) TEMA at Erlanger: TMs whose commute will increase as a result of move to Georgetown TEMA on assignment in Georgetown or another NAMC with an increase in commute (e.g., live in Union, Walton, etc.) and whose permanent location is Erlanger Not eligible Relocation Package Eligible for relocation package Must move greater than half the distance closer to the destination work location Time Card Coding You may be granted paid time off from work in order to coordinate your move. Please code your time as Company Excused Paid Time. Page 17