Accountable Plan

Timely reporting of business and travel expenses is essential for compliance with both University policy and IRS accountable plan rules. Following these guidelines helps reduce administrative burdens for employees and the University, and ensures that reimbursements and expenditures are handled appropriately.

Why Timely Reporting Matters

When expenses are not reported within the required timeframe, they fall under what the IRS defines as a non-accountable plan. Under this classification:

• The expense amount must be added to the employee’s W-2 taxable earnings.
• Federal, State, and Social Security taxes will be withheld from the employee’s next regular payroll.
• While some income tax may be recoverable through deductions, Social Security tax is not refundable.
• Regardless of tax implications, employees must still provide proper documentation for all University-funded expenditures.

Required Procedures for Expense Reporting

To comply with IRS accountable plan rules and avoid negative tax consequences, the following procedures must be followed:

Non-Travel related University credit card transactions and reimbursable expenses

• Expense reports are to be completed within 30 days of the transaction date.
• Expenses reported after 60 days may be added to W-2 earnings and taxed accordingly.

Travel related University credit card transactions and reimbursable expenses

• An approved spend authorization must be submitted before travel begins.
• All travel-related expenses and advances must be reported within 30 days of returning from travel.
• Reporting after 60 days of returning from travel may result in the expense being added to W-2 earnings and taxed.

Notifications and Monitoring

To support timely reporting, Purchasing and Travel provides regular notifications and reporting tools:

On-Demand Access

• Employees can view outstanding credit card transactions using:
  
  • Expense Transaction in the Workday Expenses Hub.
  • My Expense Transactions via the Workday search bar.
  • Using the BYU Find Credit Card Transactions report to view unexpensed transactions for themselves or others within their financial security. This report can be scheduled for automatic delivery using these instructions.

30-Day Reminder

• Transactions older than 30 days will appear in the monthly Financial Services Compliance Report.

60-Day Consequences

• The expense amount will be added to the employee’s W-2 earnings with applicable tax withholding.
• University-issued credit cards may be deactivated.
• Departmental approvers may be instructed not to authorize further travel or travel advances until all overdue reports are submitted.
• Repayment obligations remain in effect.
• The issue will be reported to the employee’s dean/director and Vice President for potential disciplinary action.
• The transaction will continue to appear in Compliance Reports until resolved.
• A $100 department penalty will be assessed for unresolved transactions.

Summary

To avoid tax consequences and maintain compliance:

• Submit all expense reports within 30 days.
• Use Workday tools to monitor and manage transactions.
• Respond promptly to notifications and reminders.
• Ensure spend authorizations are approved prior to travel beginning and related expense reports are linked to that spend authorization.

If you need help accessing reports or submitting expenses, please contact Purchasing and Travel for assistance.

Last updated: 10/8/2025