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Generally speaking and lacking any specific guidance from the IRS, companies who reimburse their employees for non-business related expenses (travel, lodging, meals and incidentals) need to report those expenses as taxable income.

Similarly, lump sum payments need to be reported to payroll and must go on the employees’ W-2 and will be subject to all applicable Federal, State, Local, FICA and Medicare personal income taxes. Companies will need to decide if they want to “gross-up” those expenses and explain to their employees the applicable tax effects.


Ineo provides complete financial solutions and tax services, contact us today to learn how we can support your program’s unique needs.


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