Accountable Plan Rules Evan Gardiner—Regulatory Accounting & Reporting Eric Smith—Travel Office Accountable Plan Rules What does this mean? • Requirements in the Tax Regulations for being able to reimburse business expenses “tax free” (Requires Timeliness, Adequate Documentation) What happens if you don’t have an Accountable Plan or if it is not followed? • All reimbursements are treated as wages, taxable to the employee and subject to withholding Accountable Plan Rules Why now? • With the recent adoption of the University-paid travel card, a growing number expenses aren’t being accounted for on a timely basis University Policy Must account for expenses within 10 days of the date of return from travel status (advances, travel card expenses, reimbursements) IRS Requirement If a reporting does not occur within 60 days of the end of the trip, amounts must be added to the employee’s W-2 as taxable wages. The employee must be charged for the resulting employment taxes required to be withheld. Events Timeline 15 Days (after the end of the trip)—Travel Office will contact travelers and/or extensity proxies regarding outstanding advances or unattached Travel Card transactions 40 Days—Another contact is made and a reminder email is sent. Transactions go on the compliance report distributed to deans and directors. They will remain on the report until properly accounted for. Events Timeline 50 Days—Regulatory Accounting will be notified. Contacts will be made to the controller liaison, controller, dean/director and/or department chairs to assist in getting documentation 60 Days—With the approval of the CFO, amounts unaccounted for will be added to the W-2 of the traveler. Travel card will be deactivated as well and no more advances will be issued to the individual. No Reversals at this point. Non-Travel or Out-of-Pocket Expenses Must be accounted for within 60 days of incurring the expense Non-compliance will result in amounts being added to the W-2 as taxable wages and appropriate taxes withheld on the next regular paycheck of the individual Questions?
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