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Ask A CPA - Educational Tax Benefits

Employer Reimbursements - Accountable Plan

If you are reimbursed under an accountable plan, your employer should Not include any reimbursement in your income in box 1 of your Form W-2. To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. Your expenses must have a business connection—that is, your expenses must be deductible under the rules for qualifying work-related education. You must adequately account to your employer for your expenses within a reasonable period of time. You must return any reimbursement or allowance in excess of the expenses accounted for within a reasonable period of time. If your expenses are more than your reimbursement, you can deduct your excess expenses on Form 2106.

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