Accountable Plan Rules

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					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?