Expense Reimbursement

You are allowed to reimburse any business expenses under an accountable plan, which means that if the expense would be reimbursable (and not taxable) to a U.S. citizen, then you can reimburse your non-U.S. visitor in the same manner. However, reimbursements for expenses that are classified as “non-accountable plan” reimbursements are generally taxable and reportable to the recipient. Note: that for individuals traveling on B visa status (or equivalent visa waiver), all expense reimbursements are taxable unless the 9/5/6 Rule is met. See NRA Definitions as well as Special Rules chart for details on the 9/5/6 Rule.

What are accountable plan reimbursements?

As indicated in IRS Publication 463 (Chapter 6):

To be an accountable plan, Emory’s reimbursement or allowance arrangement must include all of the following rules:

  1. Your expenses must have a business connection — that is, you must have paid or incurred deductible expenses while performing services as an employee or independent contractor of Emory.
  2. You must adequately account to Emory for these expenses within a reasonable period of time.
  3. You must return any excess reimbursement or allowance within a reasonable period of time.

An excess reimbursement is any amount you are paid that is more than the business-related expenses that you adequately accounted for to Emory.

Reasonable period of time

The definition of reasonable period of time depends on the facts and circumstances of your situation. However, regardless of the facts and circumstances of your situation, actions that take place within the times specified in the following list could be treated as taking place within a reasonable period of time.

  • You receive an advance within 30 days of the time you have an expense and submit an expense report within 10 days after the last date of travel. Any travel advances not reconciled within 120 days from the return of the trip will be treated as taxable income. (Note: advances are allowed only for Emory employees.) 
  • You adequately account for your expenses within 60 days after they were paid or incurred.
  • You return any excess reimbursement within 30 days after the date the expense report is submitted (or 120 days if Emory provides a periodic statement).

Travel Reimbursement

Reimbursements for expenses not considered extravagant incurred for travel (food, transportation and lodging) for employees, visitors and students. When an identifiable business purpose and benefit to Emory exists, the payment will be considered non-taxable because it meets the accountable plan definitions. This can, for example, be satisfied by participation in a conference through presenting a paper or organizing meeting sessions or assisting in a presentation or participating in collaboration with others. 

Funds provided for travel may be considered taxable when there is no identifiable business purpose or benefit to Emory.

Non-accountable plan reimbursements

As indicated on the IRS website:

A non-accountable plan payment is a reimbursement or expense allowance that does not meet all of the three rules listed earlier under Accountable Plans. Some examples are:

  • Excess reimbursements you fail to return to Emory.
  • Reimbursement of non-deductible expenses.
  • An arrangement that repays you for business expenses by reducing the amount reported as your wages, salary, or other pay. This is because you are entitled to receive the full amount of your pay whether or not you have any business expenses.

The payment may be determined to be taxable if the purpose is for the direct benefit of the individualCommon example include travel funds paid to students for their independent study, and payments related to acquiring a VISA.  In these two scenarios the rate of tax is 14 percent for F and J students and 30 percent for all others. 

Related Emory policies:

What do I do if I want to reimburse an individual for a non-accountable plan expense?

The following chart summarizes the payment process and tax, depending on whether the payee is an employee, a student non-employee, or a visitor:

Employee Non-Accountable Plan Payment
HowRoute the request to PayrollRoute the request to Payroll
TaxesConsidered W-2 wagesConsidered W-2 wages

Non-Employee Non-Accountable Plan Payment
TaxesConsidered non-compensation/scholarshipSubject to Form 1099 reporting
  • F or J Visa - 14% tax
  • Non-F or J Visa - 30% tax
30% tax withholding
ReportingNo reporting required but may be taxable to recipientSubject to 1042-S withholdingSubject to 1042-S withholding

See Paying Foreign Individuals Through Compass for instructions on how to enter the payment request in Compass for non-employees.

Common Reimbursement Examples -- Student Non-Employees

Example 1: Travel expense reimbursement related to attending a conference or seminar

  • Accountable Plan and not included in gross income if:
    • The student helped organize or facilitate the event as a representative of Emory University
    • The student presented a paper, lead a discussion and/or provided expertise gained at Emory, etc.
    • Non-Accountable plan and included in gross income if:
      • Student attended the event to enhance his/her own studies with no participation – mainly for personal benefit

 Example 2

  • Accountable Plan and not included in gross income if:
    • Expense reimbursement is related to bringing students or others to campus for a job related visit.
    • Non-Accountable Plan and included in gross income if:
      • Expense reimbursement is related to bringing non-Emory students to campus for a non-job related visit.

Example 3

  • Accountable Plan and not included in gross income if:
    • Expense reimbursements for purchase of computers (or other similar items) for class use where Emory maintains ownership of the item.
    • Non-accountable Plan and included in gross income
      • The student can keep the computer at the end of the class or session.

The chart below shows you how to calculate a gross-up under the applicable rates and how the tax withholding works:

Calculate a gross-up under the applicable rates
Visitor responsible for tax at 14% (D)Gross-up so Department Covers the Tax Due at 14%Visitor responsible for tax at 30%Gross-up so Department Covers the Tax Due at 30%
Charged as an expense to the department or project (this can be charged to a sponsored project, if allowable under the associated agreement)
Charged as an expense to the department or non-sponsored project (this cannot be charged to a sponsored project)
Visitor may receive a refund of all or a portion of the amount withheld when the visitor’s U.S. tax return is filed, depending upon other reported income
14% tax applies to nonresident alien students with an F or J visa status for non-compensation payments
30% tax applies to all other nonresident alien visitors
Reimbursement Amount (A)$500.00$500.00$500.00$500.00
Department gross-up amount of 16.28% of the reimbursement amount (B)81.40
Department gross-up amount of 42.9% of the reimbursement amount (B)214.50
Taxable amount of payment500.00581.40714.50
LESS: Tax withheld at 14% (C)70.0081.40
LESS: Tax withheld at 30% (C)150.00(214.50)
Net payment to visitor$ 430.00$ 500.00$ 350.00$ 500.00

For reimbursements where no honorarium/fee is involved, fill out the Foreign National Visitor Information Form

Note: If you are unable to fill out the Foreign National Visitor Information Form online using interactive fields, download the form using the down arrow at the top right of the form and select the Open with Adobe Reader option or use another web browser to access the form. The ability to use interactive fields may vary by browser.  Note that the country field on the Form is a drop down box.