FAQs about business expense substantiation and tax implications
On January 1, the Office of University Controller (OUC) issued a revised , which is now being implemented by the Procurement Service Center (PSC).
The underlying message, however, has not changed: certain expenses that are not properly substantiated within 90 days of the transaction date, or the trip end date when related to business travel, will be reported as taxable income on the employee鈥檚 pay advice and W-2.
Here at the 麻豆影院 Campus Controller鈥檚 Office (CCO), we鈥檝e received many questions from our valued partners about this change and how it might impact day-to-day processes. We always encourage folks to reach out to the PSC for additional information on the procedure itself, however we can answer some common questions in this newsletter.
For all commercial card transactions (e.g., procurement card, travel card, and airfare card), the employee (cardholder, traveler, or travel arranger), any delegates, the AO assigned to the PCard holder, and the HR supervisor, will all receive automatic reminders from Concur 30, 60, and 75 days from the transaction date (or a trip鈥檚 end date if related to travel) if the substantiation requirements in the revised have not been completed. These automatic Concur reminders will include an attachment listing the specific transactions that must be substantiated.
If the expenses are not substantiated within 90 days, they will be automatically reported as taxable income on the pay advice and W-2 of the relevant employee.
After an expense has been fully approved and paid, if it did not meet the required substantiation requirements, the employee will receive an automatic email notification from Concur alerting them to the tax implications of the expense.
In some circumstances, you may receive Concur notifications for transactions related to a trip that has not yet occurred. In those situations, please create a Travel Reconciliation expense report, and assign the trip-related transactions to that report. Please include the future dates of travel in the report header.
As noted by the OUC in the , simply providing documentation to a delegate for the creation of a report does not constitute substantiation and submission under the procedure.
Please ensure the expenses are substantiated in Concur and submitted into the system workflow before the 90-day deadline.
Delegates do not have the ability to submit expense reports on behalf of employees.
If you are a travel coordinator for non-employees, like students in a university club, please use the non-employee report for all expenses (including travel card transactions) relating to the non-employee travel.
For any expenses made on the Travel Card that are not related to an official business trip, the transactions must be assigned to an Employee Non-Travel Expenses report and submitted within 90 days of the transaction date of the expense. Notifications for unassigned/unsubmitted pre-paid expenses paid by Travel Card and/or Airfare Card will continue to be sent until the transactions are either assigned to a report with future trip dates as appropriate, or a report for a trip that has already completed is fully submitted in Concur.
In very rare cases, CCO may escalate requests for an exception to this procedure to the Office of University Controller鈥檚 Director of Tax. We may escalate requests when an employee has made a demonstrable and good faith effort to complete their valid expense report in Concur within the required 90-day period, but exceptional circumstances outside of the employee鈥檚 influence or control prevented the expense report from being processed as non-taxable.
CCO may reject exception requests when the expense report was submitted in Concur by an employee more than 90 days after the cost was incurred, and when:
- The employee claimed to be unaware of the PSC鈥檚 substantiation requirements; or
- The employee claimed to be unaware that the cost had been incurred; or
- The employee claimed the department was at fault for a delay in completing the report in Concur, and the delay could have been prevented by the employee with reasonable care and diligence.
If your exception request is approved by the OUC鈥檚 Director of Tax, the approval will be forwarded to the PSC by the CCO immediately after receipt. The CCO will include you in emails sent to the PSC on your behalf for notice.
The PSC sends data relating to taxable business expense reimbursements to Payroll for processing on the 15 of every month. If your exception request is granted on or after the 15 of the current month, the approved exception will be processed by Payroll in the following month/pay period.
We encourage our campus partners to communicate the expense substantiation requirements to employees early and often; and ask for help early, if you have any questions or concerns.
If you are unable to complete your expense report on a timely basis because of delays by delegates or colleagues, please be diligent in contacting your department for assistance.
If you are unable to complete a timely expense report for system-related reasons, please reach out to the for guidance.
For questions surrounding the procedural requirements and how they might affect your unique circumstances, please reach out to the or CCO for additional guidance.