KUCR policies regarding reimbursement for travel expenses incurred
in the course of business are written with the goal of meeting
the Internal Revenue Service (IRS) definition of an "Accountable
Plan". There are five requirements of a valid accountable
plan.
- Business Connection: Expenses must be valid
business expenses incurred by an employee in connection with
the performance of services as an employee. The expense must
qualify as deductible under Internal Revenue Code 162.
- Substantiation: Amounts paid under the plan
must be documented by the employee within a "reasonable
period of time" after the expense is incurred. KUCR policy
requires substantiation of expenses within 60 days of the date
the expense is incurred.
- Allowance Reasonably Calculated to Cover Expense: Any
expense advance must be calculated not to exceed the amount
of anticipated expenses and paid within a "reasonable" period
of time prior to the date of the anticipated expense. KUCR policy allows payment of the advance within 30 days of the
anticipated expense.
- Specific Identification: The reimbursement
of expenses must be identified separately from payment of wages. KUCR does not mix payroll and reimbursement payments.
- Plan Must Require Return of Unspent Allowances: The
employee must be required to return to the employer within
a "reasonable period of time" any part of the allowance
that exceeds unsubstantiated expenses. KUCR policy requires
the substantiation and return of any unspent advance within
60 days of the date the expense is incurred. Unsubstantiated
expenses and failure to return advance amounts that exceed
substantiated expenses will be reported as compensation and
be subject to withholding of FICA and federal income tax.
Without a valid Accountable Plan, KUCR would be required to
report all reimbursements as taxable income to the employee.
For the purpose of the KUCR Travel Policy, "employee" is
defined as both OVPR and University of Kansas employees. The KUCR Travel Policy applies to consultants, research participants,
employees of the State of Kansas, employees of KUCR and any other
persons traveling for the benefit of KUCR or its research programs
unless other contractual terms are approved by KUCR.
Questions? Please contact:
Jay Darnell
785-864-7775 | jdarnell@ku.edu
Manager | Financial Services — Business Services
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