Under the Internal Revenue Code, expense reimbursement, at minimum, requires:
- That expenses must be incurred expressly for university business.
- Employee expense reimbursements and procurement card transactions must be accounted for in Workday via the Expense module. This process includes selecting the business purpose from a predefined list, as well as providing a detailed description as to the nature of the expense in the memo section of the expense report. For trip related expenses, as a matter of best practices, it is recommended that the trip start date and end date also be noted in the memo section of the expense report.
- That expenses must be properly accounted for to the employer within a reasonable period of time.
- Requests for reimbursements, substantiation of cash advances and substantiation of procurement card transactions should be completed within a reasonable period of time, generally no longer than 15 days after the expense is incurred. For travel related expenses, reimbursements may be requested in aggregate within 15 days of trip completion. All procurement card purchases should be expensed within 15 days of being incurred. Expense reports with a receipt date that is 60 or more days old will route for approval to the Senior Finance Approver (a security role assigned to individuals in the Dean’s office or Financial Services for the CFU and other areas) in your School or administrative unit.
- Effective July 1, 2022, procurement cards will be suspended for cardholders with outstanding transactions. For travel related transactions, cards will be suspended for open transactions that are 90 days past the trip date. For non-travel transactions, cards will be suspended for open transactions that are 90 days past the transaction date.
- That disallowed expenses incurred by the employer must be repaid within a reasonable period of time.
- In the event that a school or department incurs an expense or reimburses an employee for an expense that is deemed unallowable under these rules, the amount must be repaid by the employee or be reported to payroll within 90 days of the disallowance.
Reimbursable expenses must conform to university policy, federal and state law, if applicable, and the restrictions placed upon sponsored awards. If under review by the university’s Tax Department, expenses incurred or reimbursed are not deemed to have sufficient business connection, then such expenses may be treated as taxable income to the recipient. Taxable reimbursements will be reported to payroll and included on the employee’s Form W-2. Taxable reimbursements made to non-employees may be reported on the IRS Form 1099-MISC or Stipend Tax Letter.