The National Directory of Certified Public Accountants

Ask A CPA - Form W-2

Employer Reimbursements - Nonaccountable Plan

Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay and report the total in box 1 of your Form W-2. You can deduct your expenses regardless of whether they are more than, less than, or equal to your reimbursement. Reimbursements you received for nondeductible expenses are treated as paid under a nonaccountable plan. You must include them in your income. You must include in your income reimbursements your employer gave you for expenses of education that you need to meet the minimum educational requirements for your job, or is part of a program of study that can qualify you for a new trade or business.

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