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Lafayette College Reimbursement PolicyGoal: To provide tax-free reimbursement of business expenses to employees through an "accountable plan" within Internal Revenue Service (IRS) guidelines.
What is a business expense? The term "ordinary" refers to an expense connected to a common and accepted practice in your profession. The term "necessary" refers to an expense that is appropriate and helpful in developing or maintaining your profession. The IRS does not consider all business expenses to be ordinary and necessary. For example, you may consider the expenses of a home office to be a business expense. However, for most of us, the IRS will not consider a home office to be deductible because, as employees, we are provided with an office here on campus. Note that if non-deductible business expenses are reimbursed on an occasional basis, such items must be included as taxable compensation (W-2).
What kinds of business expenses will be reimbursed (Note that you cannot approve your own reimbursement request):
Can I obtain a Travel Advance for reimbursable expenses that I expect to incur? For large volume programs such as Study Abroad and Interim Abroad, the College will extend the deadline for submitting the Travel and Expense Report from two weeks to 30 days. The College reserves the right to refuse Travel Advance requests for employees who have an open advance outstanding or do not submit reports on a timely basis.
How do I substantiate my reimbursable expenses and what approvals are needed? If the expense is travel-related, you should complete a Travel and Expense Report and attach the appropriate supporting documentation (explained later), have the report approved (see below), and then submit it to the Controller's Office within two weeks of your return. If you are purchasing airfare prior to your travel, please also refer to the September 22, 2000 policy statement. If the expense is not travel-related, you should submit a check request along with supporting documentation. If the expense is $100 or less, you can be reimbursed by providing your approved documentation (check request not required) to the Cashier (2nd Floor Markle) during normal office hours. The Cashier's window is closed from 12:00-1:00 for lunch. Please double-check to make sure that your documentation includes the correct Banner account number to be charged. Please also note that the reimbursement must be charged to the proper fiscal year. As an example, expenses incurred by you on or prior to June 30, 2003 must be charged to your 02-03 accounts and budgets. They cannot be held for the next fiscal year, even if your budget or other account is overspent in the current year. Faculty Travel reimbursement requests are approved by the Provost's Office. For all other reimbursement items (regardless of employee status), approval should be made by the Department Head. If you are responsible for approving reimbursement requests, you have the primary responsibility for reviewing the request. Your review should consider explanation of business purpose, inclusion of receipts and proof of payment, correct Banner account number, mathematical accuracy, etc.). When the request is received in the Controller's Office, it should be ready for processing and not require significant follow up effort by the Controller's Office staff.
What supporting documentation is necessary for reimbursement? The College follows the $75.00 IRS guideline for reimbursements of expenses related to Away from Home Overnight Travel. However, for reimbursement of day trip and local travel expenses, including business meals and other goods/services, receipts are required for all expenses (except for mileage and tolls). In all cases, the receipt needs to be sufficiently detailed (amount, date, place, type of expense-Who, What, Where, When, Why). A hotel bill should segregate valid reimbursable charges for lodging, meals, related taxes and tips, etc. from personal charges (personal phone calls, movies, health club, dry cleaning, etc.). Tear-off guest checks typically issued by restaurants will not be acceptable if they are not sufficiently detailed. Most restaurants can provide a detailed receipt from the register. A copy of your monthly credit card statement is not a valid receipt because it does not provide sufficiently detailed information. Purchases made electronically (via the Internet) must be substantiated via hard copy if you want to be reimbursed. Before you press the "send" or "enter" key, you may need to print the details of the purchase from your computer screen. Again, a copy of your monthly credit card statement is not a valid receipt. If the receipt does not indicate how you paid the expense, you must also provide additional documentation to show proof of payment (such as your cancelled check, copy of your credit card statement, statement from vendor re: cash payment made). If you are submitting your credit card statement as proof of payment, please block out your account number and, if you wish, those charges/credits on the statement that do not apply. Please do not block out your Name. If the purchase was made via credit card, you may request reimbursement before you actually pay your credit card company. If you did not pay for the expense, you will not be reimbursed for it. Incentives such as Frequent Flyer miles, vouchers, coupons, and other non-cash incentives do not constitute and will not be accepted as proof of payment because these are not "out of pocket" for the expense. Items such as gift cards or gift certificates will not be accepted as proof of payment even if you purchased the gift card or certificate from personal funds.
Which specific business expenses qualify? Reimbursable Away from Home Overnight travel expenses include: Lodging-both en route to/from and at your destination. Note that if you book a room through an Internet site (Travelocity, Expedia, etc.-- prepaid or not), it is still your responsibility to provide an original hotel bill and proof of payment as described above. Meals - Meals taken both en route and at the destination are reimbursable at 100% of their cost (including taxes, reasonable tips, etc.). Transportation costs to and from the meal (including parking) are also reimbursable. Transportation - This includes costs to get to/from your destination and local travel costs while at your destination. Included are between your home/campus and airport, bus station, etc. and to your hotel. Also included are necessary transportation expenses once you have arrived and are conducting your business (rental car, taxi, bus, subway, etc.). If driving your personal vehicle, you may be reimbursed for either 1) mileage driven, at the current Federal limit of $.36; or 2) your actual gasoline cost, but only for the miles driven. Tolls and parking will also be reimbursed. Under no circumstances will reimbursement be made for items such as oil changes, anti-freeze, repairs, insurance, towing, motor club, or other expenses of operating your personal vehicle. If driving a College Motor Pool vehicle, you will be reimbursed only for gasoline, tolls, parking, etc. in accordance with the College's Motor Pool policy. Mileage reimbursement does not apply here. Phone & Fax Charges - Business-related phone and fax charges incurred while doing business away from home overnight are reimbursable. In addition one long-distance personal call for each day of over-night travel will be reimbursed. Personal calls should not be lengthy. On a related matter, if the traveling employee anticipates significant long-distance business-related phoning activity, using a College calling card is cost effective and strongly recommended. All other calls are a personal expense. Click here for guidance on Cell Phone reimbursement charges. Tips - Reasonable tips connected with the above expenses (not more than 15%-20%) are reimbursable. Examples of Non-reimbursable items for Travel Away from Home Overnight include:
2a) Travel-Day Trips If driving a College Motor Pool vehicle, you will be reimbursed only for gasoline, tolls, parking, etc. in accordance with the College's Motor Pool policy. Mileage reimbursement does not apply here. Examples of Non-reimbursable items for Day Trips include:
2b) Local Travel If the employee travels directly to or from an off-campus business appointment from home, only the difference between the commuting distance from home to campus and the appointment location is reimbursable. Commuting from home to work is not reimbursable, even if the employee works on an unscheduled workday.
3) Business Meals Here again, the principles of an ordinary and necessary business expense apply. First, there must be a clear business reason for the meal. Substantial discussions need to take place in order for the meal to qualify. The College is taking the position that for Business Meals to be reimbursed, some outside party (donor, vendor, student, parent, peer from another institution, employment candidate, etc.) must be present and be an integral part of the business discussions at the meal. When a spouse is included in the group, his/her meals will not be reimbursed unless the spouse's presence is integral to the business being conducted. Most meals involving only College employees will not be reimbursed as most College business should be able to be accomplished during normal business hours. Exceptions may be made when business meals involving only College personnel are "infrequent" in nature. For this purpose, the term "infrequent" is defined as occurring not more than once a month. For the exception to apply, the requestor will have to document why a meal was necessary to accomplish the College's business. Examples of appropriate infrequent business meals involving only College employees include:
Examples of meals that are not reimbursable:
4) Reimbursement for Purchases of Goods and Services The College has a central Purchasing Office that must be used for most purchases of goods and services. Major exceptions to this policy include both the Library (for books, periodicals, microforms, etc.) and the College Store (for textbooks, clothing, and other inventory items). These offices have their own separate purchasing systems and have customarily made their own purchases for the items above. The College's basic policy for the purchases of goods and services is that these purchases must be made by the College and that the College pay its vendors directly. Any requests by vendors for prepayment of goods or services prior to receipt must be reviewed and processed by the Purchasing Office. The College recognizes that it may not be cost-effective to issue a large volume of small dollar purchase orders. Departments can issue their own Limited Purchase Orders up to a maximum of $500. It may still be necessary for an employee to make the occasional direct purchase of goods and services. In such cases, the College will reimburse employees for such purchases. Original receipts, proof of payment, business purpose, and proper approval are required before reimbursement of your expense is made. You will not be reimbursed for any Pa Sales tax that you paid for the purchase because you, as purchaser, are not Pa Sales Tax exempt. You will also be responsible for obtaining the Federal Tax Identification Number of the business or individual that was paid directly by you for the goods or services. This is accomplished when you obtain an IRS W-9 Form (W-9 Form) from the Controller's Office and request the vendor to complete and sign the W-9 Form. The W-9 Form must include information about the vendor's name, address, form of business, and the Tax ID Number. The W-9 Form must be complete and legible. The College is required by the IRS to collect Tax ID information on all of the vendors we pay. The College is penalized if the W-9 Form information is not accurate. If you pay the vendor, it is as if the College's Accounts Payable office paid the vendor-you must obtain the Tax ID Number and the College must report the payment depending on the total paid for the year. Please keep in mind that if you use the Internet or some other electronic medium for your purchase, you must still provide a hard-copy document that explains the details Examples of items that qualify for reimbursement include:
Examples of items that do not qualify for reimbursement include:
February 2003 |
