• Guidance Issued on Employee Expense Reimbursement

    Guidance Issued on Employee Expense Reimbursement

    It is possible for employers to reimburse their employees for out of pocket expenses incurred on a tax-free basis, as long as the rules of an Accountable Plan are met. Furthermore, it is required that the reimbursement must have a business connection, this implies that allowances, advances, or reimbursements in the plan are restricted to expenses that qualify as business expenses. All this is under the code and that an employee pays or incurs in connection with the employee’s performing services for the employer. Also, employees’ reimbursed expenses are to be substantiated by the employees and any excess amounts paid are to be returned to... Read More