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When the traveler is on a trip that did not require traveling overnight, the IRS requires us to record the meals reimbursed for that day as taxable income on the employee's W-2 form.
On the Employee Reimbursement System, the taxable meals are recorded automatically. If either the Depart Time or the Return Time shows as Overnight, no taxable meals are recorded. However, if you departed and returned the same day, the default setting for Taxable Meals will change from No to Yes.
If the primary purpose of a particular meal was to discuss business, the Yes indicator can be changed back to No if the traveler indicates in the Other Comments box the name(s) of the other person(s) and the business topic discussed.
The default settings for Taxable Meals should never be overridden unless this information is provided for each meal exempted from reporting.
The Daily Expense Detail menu option allows you to review which meals have been recorded as taxable before you submit expenses for routing. Changes cannot be made to a Reimbursement after it has been routed, unless the Reimbursement is rejected by the approver.
The only Depart Times and Return Times that should be entered are the times you depart or return to Ames (or whatever is your official station). If you take a trip to South Carolina and mistakenly enter the times you left and returned to the hotel, the system will treat that as a day trip, and your meals will be recorded as taxable income.
Never change the Taxable Meals indicator from No to Yes. Taxable meals have nothing to do with sales tax. The IRS requires us to report as taxable income any meal reimbursement not requiring overnight travel, unless the primary purpose of the meal was to discuss business.
Group meals (for interviews, etc.) should be listed entirely in the Miscellaneous Expenses – Other field. The attendees and the business purpose must be stated.
Continue to Allocate Expenses / Review by Fund Account
