Travel Accountable Plan
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." Without a valid Accountable Plan, KUCR would be required to report all reimbursements as taxable income to the employee. 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.
For the purpose of the KUCR Travel Policy, "employee" is defined as 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.