Texas A&M University System Policy requires that all employee reimbursements/employee travel expenses must be adequately accounted for within 90 days or the expenses will be reported as taxable income to the employee (through the Payroll office). The Texas A&M System implemented this policy to meet the “reasonable period of time” in the Internal Revenue Service (IRS) accountable plan. Expenses that fall within the IRS accountable plan are not reported as taxable income to the employee.
IRS Accountable Plan
- Employee expenses must have a business connection
- Employees must adequately account for these expenses within a reasonable period of time
- Employees must return any excess reimbursement or allowance within a reasonable period of time
For travel, this means the submission of an Emburse expense report within 90 days of travel end date.
- Best practice is to submit the report within 30 days
- The report applies to both out of pocket and agency/university travel card transactions
- If the report is not submitted within 90 days of travel end date, expenses become tax reportable income to the employee and a tax withholding form must be attached to the expense report
For purchase reimbursements, this means the submission of an AggieBuy non-Purchase Order (non-PO) based invoice within 90 days of the receipt date.
- Best practice is to use a One Card to avoid personal reimbursements
- If the non-PO is not submitted within 90 days of receipt date of purchase, expenses become tax reportable income to the employee and a tax withholding form must be attached to the AggieBuy invoice
Department business office should date stamp employee receipts when they are received. This is done so that if the Emburse travel expense report or AggieBuy reimbursement is not submitted within 90 days, we could have an exception on which to not tax the employee. In other words, if the employee did turn in the receipts within the 90-day window – based on date stamp – but the travel report or invoice was not created until after 90 days, we have a justification to not follow System Policy.
Keep in mind that if the Emburse expense report is not submitted within a timely manner, and it has travel card transaction(s), the employee runs the risk of their One Card being suspended until the report is both submitted and approved. Please remember that charges on the One Card are initially paid on a Fiscal Office account – Texas A&M (TAMU) or Texas A&M Engineering Experiment Station (TEES) – and the charges are not put on the proper account until the Emburse Expense Report is submitted and approved. Please see the Aging Transaction Policy webpage for more information.
For questions on how to complete the Tax Withholding form, please email TEES Payroll or visit the Tax Withholding Form Instructions webpage.