Employee accountable plan

An employee accountable plan is a means of reimbursing employees for company expenses they have paid out of their pocket. In such cases, the employer pays for and deducts all costs and the employee does not deduct any expenses. The reimbursements are not reported as income to the employee and are not subject to payroll taxes.

The three requirements for an accountable plan are:

1. There must be a business connection and the expense must be reasonable
2. There must be reasonable accounting for the expenses
3. All excess reimbursements must be repaid in a reasonable time

Also search for "non-accountable plan."