Twists & Turns of Travel & Other Payroll Expenses - PowerPoint PPT Presentation

twists turns of travel other payroll expenses l.
Skip this Video
Loading SlideShow in 5 Seconds..
Twists & Turns of Travel & Other Payroll Expenses PowerPoint Presentation
Download Presentation
Twists & Turns of Travel & Other Payroll Expenses

play fullscreen
1 / 32
Download Presentation
Twists & Turns of Travel & Other Payroll Expenses
Download Presentation

Twists & Turns of Travel & Other Payroll Expenses

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. Twists & Turns of Travel & Other Payroll Expenses Thursday, May 29, 2008 10:00 – 11:30 am DPHHS Auditorium

  2. Agenda • Travel Policy Reminders • Tax Regulations • Utilizing HR system to Pay employee expenses • Taxation of Certain Expenses • Resources

  3. In regards to travel… • Major budget consideration • Always consider • Efficiency of travel • Economy of travel (1-0300.00)

  4. Travel Policy Applies To…. • Elected officials • Appointed members of boards, commissions or councils • Department directors • All other state employees • Unless covered by separate statute (1-0300.10)

  5. Considered to be in travel status when… • Per the IRS, employees are considered “traveling away from home” if their duties require them to be away from home substantially longer than an ordinary day’s work and they need to sleep or rest to meet the demands of their work.

  6. Tax Home • Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located. 

  7. Assignment away from main place of work • Temporary Assignment • Expected to last for one year or less • Tax home does not change • Considered to be in travel status • Indefinite Assignment • Expected to last for more than one year • Becomes tax home • Not considered to be in travel status Notes (IRS Pub 463): If your assignment or job away from your main place of work is temporary, your tax home does not change. You are considered to be away from home for the whole period you are away from your main place of work. You can deduct your travel expenses if they otherwise qualify for deduction. Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for one year or less. However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than one year, whether or not it actually lasts for more than one year. In either of these situations, you must be out of the city or general area of your original tax home.

  8. Travel Policy does not apply to: • Commuting costs • Meals provided at meeting or conference when not in a travel status • Non-business related expenses • Tips and taxes on meals • Travel within the same general vicinity as your home or headquarters (mileage/meal reimbursement may apply) (1-0300.25 – tips and taxes/misc expenses) (1-0310.20 and 1-0310.40 mileage reimbursement) (1-0320.10 meals

  9. Travel Shift • Begins one hour before regularly scheduled work shift • Ends one hour after regularly scheduled work shift • To extent possible, travel within normal travel shift to reduce expenses (1-0320.10 travel shift definition)

  10. Mileage Reimbursement Rates • Standard Rate • 24.5/mile • Defined as a % of IRS standard rate • High Rate • 50.5/mile ( 0 <= 1000 miles/month) • Equal to IRS standard rate • Per IRS, applies equally to cars, vans, pickup and paneled trucks • Low Rate • 47.5/mile ( > 1000 miles/month) (1-0310.10 mileage rates)

  11. High rate to be used when: • State car not available OR • Includes either motor pool, state-owned or leased vehicle • Personal vehicle is in the state’s best interest OR • Legislators and members of the general public on official state business If these conditions are not met, you must reimburse for mileage at the standard rate. (1-0310.30 high rate allowed when)

  12. Exemptions from Standard Rate • Specifically authorized at high rate • Members of boards, commissions, committees, or advisory councils unless related to state employment • Employees driving 25 miles or less in any calendar day (1-0310.40 standard rate exemptions)

  13. Meal Reimbursement • Must be in travel status for more than 3 continuous hours • Generally, must be at least 15 miles from headquarters or home, whichever is closer • Rates do not vary by location for high cost locations. • This applies to both the in-state or the out-of-state rate. • Number of meals allowed depends on travel shift (1-0320.00 general meal allowances) (1-0320.10 number of meals allowed)

  14. Meal Reimbursement not allowed when … • Normal travel shift was extended to eat • Meal was included in the cost of a conference • Meal was provided by the State or other governmental entity (1-0320.10 meals during an extension of travel shift)

  15. Lodging Reimbursement • Rate is before applicable taxes • In most cases, sales and/or bed taxes will be required to be paid. Each taxing jurisdiction governs how and to whom an exemption is granted. • ALWAYS ASK FOR THE BEST RATE • For example: The State rate is $70, however the hotel is offering their rooms at $55 to all other travelers. The hotels are not required to charge the state the $70 rate (as some claim they are), the state will gladly accept a lower rate. (1-0340.20 and 1-0350.20) lodge reimbursement rates (1-0340.25 and 1-0350.30) lodging at actual cost

  16. Tax Treatment for Employees • Taxable Travel for Employees • Any meal with no associated overnight stay • SHOULD be reported on employees W-2 not 1099-MISC • If not paid in HR system, then an adjustment must be submitted to HR for inclusion on the applicable W-2

  17. Non-Employee Travel Reimb • Taxable if NOT reported under an accountable plan • Must be reported on 1099-MISC

  18. Accountable Plan • Travel Expenses… • Must be for business • Must be reasonable • Must be substantiated • All excess reimbursement are repaid • If above requirements are met, then the expenses are considered to be non-taxable to non-employee

  19. Policy • Legislature • Establishes laws governing travel • DOA • prescribes the policy • Agencies • responsible for adhering to the policy and providing effective managerial control (1-0300.00)

  20. Policy Location • State Travel Information link located on DOA’s homepage • • Travel Policy Page •

  21. Highly Recommend Entering Expenses in HR • Reimburses employee through paycheck • No need to set up employee as a vendor and keep track of expenses paid through Financials. Also no need to update both databases as addresses and last names change. • Eliminate risk of employee receiving both a W-2 and a 1099 from the State. • Reduces manual tracking and keying and countless end of the year off-cycles.

  22. Timing an issue?SABRHS Financials warrants issued daily, but SABHRS HR checks are only biweekly. • When pending travel & approximate expenses are known & approved, temporary travel advances can be included in paycheck. • Once receipts are collected after the travel complete, offsetting entries can be recorded to itemize the advance. • Any differences between the advance and actual expenses can be accounted for and paid/collected on the next check. • Most employees who travel will have a ProCard to cover expenses.

  23. Business Process an issue? • Contact Human Resource Information Services to see what can be done to make paying expenses through the HR system feasible for your agency. •

  24. Steps to Enter Expenses in SABHRS HR Payroll for North America>Montana Payroll Processes>Expense Entry Entering expenses in HR is completed on one screen – type expense code used, Task Profile ID to charge the expense, and the amount of the expense. Then Save.

  25. Approving Expenses: Payroll for North America>Montana Payroll Processes>Expense Finalization Approving expenses is also completed on one page, and can be completed one employee at a time or by all employees in your agency who have expenses.

  26. Once reviewed, you can approve one at a time by selecting each checkbox as you go or select “Finalize All”. Then save your changes and you are done.

  27. Travel Expense Tax Calculations • A complete listing all Time Reporting Codes and Expenses and how each are taxed can be found on SABHRS Documentation • (MINE homepage > SABHRS Documentation > Human Resources > Job Aides > Crosswalk for TRCs/Earnings/ Deductions/Tax/GL Account Code ) The following slides detail how travel expenses specifically are taxed:

  28. Taxable Travelall at Supplemental Rate (25% for Federal and 6% for State)

  29. Non-taxable TravelAll remaining travel expense codesare not taxed.

  30. Remember: • Changing W-4 to accommodate travel expense reimbursement has NO impact on the taxation of the check.

  31. Contacts • Julie Feldman, State Accounting Division 444-3094 / • Kathy Coey, Human Resources Information Services 444-5215 / • Darci Harrison, Human Resources Information Services 444-5217 /

  32. Disclaimer • The Department of Administration employees are not tax experts and do not attempt to provide tax advice or legal counsel. • The information contained in this presentation is subject to change due to changes in policy and/or law.