Commentary

4.2 Employee business expenses

United States
United States | Commentary

4.2 Employee business expenses

United States | Commentary

4.2     Employee business expenses

An employer should have a reimbursement or allowance policy to pay allowances and reimbursements of employee business expenses. In order for payment of these amounts to be treated as a non-taxable payment, the plan must qualify as an accountable plan under the IRS rules. In addition, the expense must be an allowable ordinary and necessary business expense.

The employer's reimbursement or allowance arrangement will qualify as an accountable plan if it requires the following:

  1.  

    •     The expenses are incurred while the employee is performing services for the employer. The expenses must be a reimbursement

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