University Accountable Plan
Learn about the university’s accountable plan, which allows it to reimburse employees and nonemployees for authorized business expenses.
In accordance with IRS regulations, the University has an accountable plan that allows it to reimburse employees and non-employees for authorized business expenses with no impact on taxable compensation. The accountable plan rules apply to all payments, reimbursements, or advances for authorized business expenses both travel and non-travel related.
To comply with the University’s Accountable Plan, payee must:
- Have paid or incurred business-related expenses while performing services for the University. To satisfy this requirement, there must be a business connection or purpose for the expense and the expense must be ordinary and necessary.
- Properly account for and substantiate the expenses within a reasonable period of time after the expenses are paid or incurred:
- To satisfy this requirement, an employee must document and request reimbursement for business expenses within a reasonable period of time after the expense is paid or incurred.
- Travel-related expenses must be accounted for within a reasonable period of time after the last day of the trip.
- Expenses are substantiated with original, itemized receipts, or when not available, a printed receipt showing proof of purchase and payment.
- Per diem reimbursements may be paid without supporting documentation up to the maximum allowed by state travel policy.
- Return any payment, reimbursement, or advance in excess of amounts substantiated within a reasonable period of time after the expense is paid or incurred.
If one or more of the above three requirements are not met, the payment, reimbursement, or advance to the employee will be included in the employee’s wages, subject to tax withholding, and reported to the IRS and the employee on the applicable form. Substantiation requirements of the policy also apply to non-employees (e.g., independent contractors) conducting University business.