Loyola Faculty and Staff,
The purpose of this message is to notify you of a change regarding the processing of Expense Reimbursements. All Expense Reimbursements submitted more than 90 days following the date of the expense or the last date of travel will now be considered taxable income to the employee and subject to income and withholding taxes. The effective date of this change is April 1, 2016.
BACKGROUND ON THE CHANGE:
During a recent internal audit at the University, it was noted that the IRS requires an employer to require its employees to submit business and travel expenses for reimbursement by the employer within a reasonable period of time following the incurrence of the expenses. Otherwise, the reimbursement is taxable to the employee.
The IRS has indicated that requiring an employee to submit an expense for reimbursement within 60 – 90 days of the incurrence of the expense meets the reasonable period of time test.
After considering relevant factors, including benchmarking of peer institutions, IRS related information and the frequency of faculty and staff travel, Loyola University Chicago has determined that, to comply with IRS requirements, it would be appropriate and within IRS requirements to require employees to submit business and travel expenses for reimbursement by the University within 90 days of the incurring the expense or completing the travel. As a result, any request for reimbursement of an expense submitted more than 90 days following the date the expense was incurred or the travel was completed will be treated as taxable to the employee and subject to income and withholding taxes.
It is recommended that all expenses be submitted for reimbursement within 30 days after the travel is completed or the expense is incurred to allow time for processing and approvals.
Please note that the date used to determine whether or not a report is submitted after 90 days is the date the documentation is submitted to Accounts Payable.
Please do not hesitate to contact LaShonda Smith, Accounts Payable Manager, at the e-mail or phone number below with any questions regarding this change.
Accounts Payable Manager