Accountable Plan

Timely reporting of business and travel expenses complies with University policy and IRS accountable plan rules, easing reporting burdens for both employees and the University. Employees who do not provide timely reporting of university expenses become part of what is called by the IRS, a non-accountable plan. Under non-accountable plans expenditures made by employees must be reported to the IRS as additions to W-2 taxable earnings, and appropriate State, Federal and Social Security taxes must be withheld from the next regular payroll of the employee. Based upon individual circumstances, some withheld income tax may be recoverable to the extent that business expenses can be deducted, but Social Security tax withheld is not recoverable. However, proper accounting to BYU for expenditures using university funds is still required.

To avoid those negative consequences and meet accountable plan rules, the following procedures will be followed:

NON-TRAVEL BUSINESS EXPENDITURES

Employees who use University credit cards or personal funds for local transportation or business expenses must complete accounting within 30 days after the expenditure. Reporting later than 60 days will result in the addition of the expense amount to W-2 earnings with payroll tax withholding on the next regular payroll.

TRAVEL EXPENDITURES

Submission of an approved travel authorization is required in advance of travel. Travel expenditures and advances are to be accounted for within 30 days of the travel return date. Reporting later than 60 days from the travel return date (or 90 days in the case of foreign group travel) will result in the addition of the expense amount to W-2 earnings with payroll tax withholding on the next regular payroll.

NOTIFICATIONS

Notifications and reports are provided by Purchasing and Travel in an effort to promote timely reporting of transactions.  Days listed below are from purchasing card/personal fund expenditure for a non-travel business expense, or from completion of travel, respectively.

· On-demand – A report is available from the Chrome River landing page that can be run on demand by an employee, delegate, or controller to review transactions that are aging.  The data in this report is refreshed daily.

· 30 Days – Transactions older than 30 days will be included in the monthly Financial Services Compliance Report.  One week prior to this reporting, an email to the controller will remind them to run the on-demand report and complete the recording of transactions that will be 30 days or more on the compliance report date.

· 60 Days – Transactions older than 60 days are subject to being included in the employee’s next payroll W-2 earnings with previously described tax withholdings. Absent extenuating circumstances or university error, once that action is taken, it will not be reversed. In addition:

• The employee’s university-issued credit cards will be deactivated.
• If the transaction is travel-related, departmental approvers will be directed not to authorize additional travel or travel advances for the employee until all deficient reporting is completed.
• Repayments continue to be due to the university and will be reported to the employee’s dean/director and Vice President to determine if disciplinary action should be taken.
• The transaction will be included in subsequent Compliance Reports until resolved with a department penalty of $100.
  

Last updated: 7/13/2020