Accountable Plan

Accountable Plan

A plan used by a business to reimburse its employees for expenses they incur for work purposes. For example, an employee on a business trip may be required to pay for a hotel room with his/her own money and later receive a reimbursement. Under an accountable plan, the reimbursement the employee receives is not included in his/her income. Because it is not part of one's income, the reimbursement is not a tax write-off, which is why the accountable plan was devised.

Accountable Plan

A plan for reimbursing employees for expenses such as meals, entertainment, travel, and transportation incurred for business purposes on behalf of the employer. A plan is an accountable plan if the employer requires the employee to adequately account for all business expenses and to return any excess reimbursements. For employees under an accountable plan, reimbursements aren't entered on the tax return as income and the expenses aren't deductible.
References in periodicals archive ?
Amounts paid to an employee under an accountable plan for tickets to a sporting event must meet several conditions, in addition to the usual accountable plan requirements, to be deductible as a business expense by the employer.
This program improved outcomes and behaviors: Meetings started and ended on time, had a defined purpose and the right people were in attendance; meetings stayed on topic and participants developed an actionable and accountable plan for follow up.
The church reimbursed all of J's business expenses related to his service at the church under an accountable plan.
The court's definition in TLC is inaccurate to the extent in relies on the accountable plan rules, which cover only employee reimbursement arrangements, in determining the existence of a reimbursement or other expense allowance arrangement to identify who bears the expense under
This includes wages, employee benefit and deferred compensation plans, employer-provided fringe benefits, reimbursement of payments to employees under an accountable plan for the employee's business travel expenses, and payments made by the employee to providers of the employee's travel, meals, and lodging when the employee is traveling on government business and is reimbursed under the accountable plan.
It is not just the terms of your accountable plan that matter.
Along with the revenue procedure, the IRS issued Revenue Ruling 2002-35, which clarifies that payments to employees for equipment they are required to provide as a condition of employment are wages for federal employment tax purposes, unless such payments are paid under an accountable plan.
Under Revenue Procedure 2002-41, employers may pay certain welders and heavy equipment mechanics an amount of up to $13 per hour for rig-related expenses that it is deemed substantiated under an accountable plan when paid in accord with this revenue procedure (up to $8 per hour if the employer provides fuel or otherwise reimburses fuel expenses).
The final regulations confirm that qualified parking does not include any reimbursement for parking that would otherwise be excludable under section 62(c) of the Code as an amount paid under an accountable plan or as in-kind parking that would be excludable as a working condition fringe under section 132(d) of the Code.
An accountable plan requires the employee to provide the employer with documentation of the expenses incurred.
Employer-required lodging expenses may now be deductible as an employee business expense or, if paid or reimbursed by the employer, excluded under an accountable plan, even if the employee is not away from home.
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