Employee Travel Expenses
RATIONALE: To ensure that Juniata College adheres to the Internal Revenue Service Codes. The IRS requires that reimbursable business expenses not be lavish or extravagant under the circumstances and must be governed by the substantiation rules of section 274(d) of the Internal Revenue Code. Refer to Code Sec. 162(a)(2) and section 274(d) of the Internal Revenue Code. www.fourmilab.ch/ustax/www/contents.html.
Any exceptions to this policy will require the Controller and area VP approvals.
- Employee travel expenses must be substantiated as to amount, time, place and business purposes. A diary or similar record is needed that lists the background details of your travel and entertainment expenses.
- Use the EXPENSE REPORT-TRAVEL VOUCHER (available in the Accounting Services Public Folder). All expense reports, including this Expense Report-Travel Voucher, must be signed by the employee claiming reimbursement and approved by his/her supervisor or their designee.
- Receipts, vouchers or similar statements are needed for all expenses, with the exception of tipping and gratuity expenses. The receipt must show the following information regarding the expense: (1) the amount; (2) the date incurred; (3) where and with whom; (4) nature of expense. Hotel or lodging statements must show separate charges for lodging, meals, telephone charges, etc. Personal entertainment (movies, snacks, etc.) and personal phone calls will NOT be reimbursed by the College.
- Appreciation gifts may be provided if alumni or friend of the College provide lodging and/or meals for an employee out of town on College business. The small gift should be purchased at the College Store (value not to exceed $30). In lieu of the College Store gift, an employee may choose to thank the benefactor with dinner or some other token of appreciation. If so, the cost of the meal or gift provided should not exceed what the employee would have otherwise paid for the night's lodging.
- To qualify as a business meal, the business trip must last "longer than a regular working day (but not necessarily 24 hours) and requires time off to sleep (not just to rest) before returning home." This is called the overnight-sleep test. Breakfasts will be reimbursable on the first day of an overnight business trip only if the trip begins earlier than 6:30 a.m.
- Exceptions to overnight-sleep test
- One-day business trips which cause the participant(s) to be away from their residence at "normal" evening meal time should be reimbursed for any actual meal expenses incurred on the way home. For a day business trip to qualify for evening meal reimbursement, the participant(s) must be at least one (1) hour from their home or College, whichever is closer, at the end of the normal work day. Lunches do not qualify for reimbursement on one-day business trips.
- One-day business trips to attend seminars or educational presentations that last over the lunch hour may have lunch reimbursed.
- Exceptions to overnight-sleep test
- Other ordinary and necessary meal expense is not allowable by IRS unless you can establish that the "expense is directly related to the active conduct of his trade or business. If a meal expense directly precedes or follows a substantial and bona fide business discussion (including a business meeting at a convention), then it must be established that the expense is associated with the active conduct of a trade or business." Taking a prospective employee or donor out to lunch as part of a recruitment or cultivation effort will qualify for reimbursement if properly documented.
- Maximum guidelines (listed below) which include gratuities have been established for meals; requests for reimbursements in excess of these amounts must receive approval from the Controller before they will be reimbursed, otherwise, they will be viewed as personal expenses. Special circumstances, which would include costs pertaining to certain fund raising initiatives, involving prospective donors, and other extraordinary academic or administrative activities, may be approved by Cabinet Officers. Areas that are considered "High Cost" by the IRS are reimbursable at 125% of amounts stated. A list of "High Cost" areas is attached.
SPECIFIC MAXIMUM GUIDELINES FOR REIMBURSEMENTS:
- Entertainment & Appreciation Expenditures for Staff and Students: The College provides several functions each year that express its appreciation and gratitude for work done by staff and students. Additional expressions (meals or gifts) are not considered necessary.
- Meals: Breakfast Lunch Dinner
Meal including gratuity $10.00 $12.00 $32.00
- Tipping and Gratuities: The College views tips or gratuities of 15% for good service on meals or services costing more than $7.00 to be adequate.
- Valet and Cleaning Services: The College will reimburse reasonable valet and cleaning services for clothing if an employee is traveling out-of-town continuously on College business for one week or more.
- Automobile Use: Employees are reimbursed for College use of their personal automobile at the standard mileage rate published by the IRS. This rate is $.405 per mile for calendar year 2005.
Employees may need to rent a vehicle while traveling on College business. It is not the responsibility of the College to provide luxury vehicles in these instances. The College carries insurance coverage for hired or rented vehicles; the employee should not purchase additional insurance coverage. Employees are encouraged to rent vehicles using a College "Purchasing Card". This automatically provides additional insurance.
- Public Transportation Expense: When it is necessary for the employee to use public transportation on long trips, reservations should be made using the "Purchasing Card". Adequate written explanation of the business purpose of the trip is required.
- Non-Employee Travel Expenses: Travel expense deductions for an employee's spouse or dependent are permitted only if the following conditions are met:
- a bona fide business purpose for their presence is established AND these expenses would otherwise be deductible AND the spouse or dependent is a bona fide employee of the College. (Trustees are considered employees.)
The cost of taking a spouse or other non-employee along on a College business trip is not reimbursable unless it can be shown that their presence "serves a bona fide business purpose." In addition, specific responsibilities and duties must be described in writing and prior approval from the Controller must be given before expenses can be incurred. If reimbursement of non-employee travel expenses are approved, the employee is responsible for segregating all (meals, hotel, air fares, etc.) of the spouse's expenses from their own.
- Other Business Expenses: Normal purchasing procedures of the College should be used when possible, but occasionally, an employee may find it necessary to purchase goods and services not strictly related to "travel expenses". For example, an instructor at a conference may be able to buy educational slides or books which could be used in their classroom. These expenditures should be reported on the Juniata College EXPENSE REPORT-TRAVEL VOUCHER. List the amount and account number to be charged, explain the nature of the expenditure, and attach the receipt.
- Advances and Advance Clearings: see separate policy.
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