Policy Statement
Where allowable under IRS guidelines, Claremont McKenna College (the College) will reimburse an Employee for, or pay directly via College purchase card, actual college-related travel, entertainment or other business related expenditures that are necessary in the performance of his/her assigned responsibilities. Employees with a College purchase card are encouraged to use it for all payments that can be made by credit card.
IRS Guidance
The Internal Revenue Service (IRS) requires that all of the following conditions be met to qualify for tax-free reimbursement of business expenses:
- Expenses must be reasonable and have a legitimate college-related business connection - that is, you must have paid or incurred deductible expenses while performing services as an Employee of the College..
- The Employee must adequately account to the College for expenses in a reasonable period of time.
- The Employee must return any excess reimbursement or allowance within a reasonable period of time.
Guiding Principles
- The IRS does not allow for tax-free reimbursement of lavish or extravagant expenses. Employees are expected to use prudent judgment and ensure all expenses submitted for reimbursement are reasonable based on the facts and circumstances.
- Employees should verify that sufficient budget funds are available in advance of any purchase by reviewing their accounts online via Workday, or by contacting a Department Supervisor or the Business Office. Reimbursement requests in excess of budget funds available may not be reimbursed.
- The college-related business purpose of all expenses submitted for reimbursement must be thoroughly documented. Reimbursement requests submitted with insufficient documentation of the college-related business purpose will be returned to the Employee requesting reimbursement.
- Reimbursement requests should be submitted within 60 days of when the expense was incurred or return from travel. Due to IRS requirements, any expense reimbursement submitted beyond 60 days of when the expense was incurred or return from travel will be added to the Employee’s taxable income and subject to applicable taxes/withholdings.
- Unless otherwise noted below, you must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses. Documentary evidence is not needed if your expense, other than lodging, is less than $75.
Authorization
Employee expense reimbursement requests should be approved by the appropriate department chair, director or other authorized supervisor. All expenses incurred by a Vice President (other than the Treasurer) or the President will be approved by the Business Office; and the expenses of the Treasurer will be approved by the Secretary of the College. Reimbursements to the President will be reviewed on a periodic basis by the Chairman of the Audit Committee. The supervisor approving a reimbursement request is responsible for ensuring budget funds are available and there is sufficient documentation of the college-related business purpose for all expenses submitted.
Reimbursable Expenses
Traveling Away from Home: According to the IRS, you are traveling away from home if your duties require you to be away from the general area of your tax home substantially longer than an ordinary day’s work, AND you need to sleep or rest to meet the demands of your work while away from home. Certain categories, as identified below, require that Employees meet the IRS definition of traveling in order to be eligible for reimbursement. In General, the mode of transportation used should be the most economical one suitable for the purpose of the trip.
Airline: The College will reimburse coach/economy class airfare tickets for domestic travel and economy or business class airfare tickets for international travel. First class tickets will generally not be reimbursed to the extent that the cost exceeds that of a coach/economy for domestic travel or business class ticket for international travel. An invoice/travel itinerary is required for reimbursement. Boarding passes for all segments of the trip, or other evidence of travel (i.e. hotel folio, conference badge, etc), are required as substantiation for travel purchased via an Employee’s personal credit card. Air transportation purchases made via an Employee’s personal credit card that are reimbursed prior to the date of travel may be recorded as a travel advance. To clear the advance, Employees should submit an expense report with boarding passes for all segments of the trip, or other evidence of travel, within 60 days after return from travel. Any frequent flier miles, or other travel related incentives earned, accrue to the Employee.
Personal Automobile: The College will reimburse Employees for mileage when a personal vehicle is used on official college-related business that is properly authorized, reasonable and appropriately documented. If the mileage is not connected with an overnight business trip, the mileage reimbursement will be reduced by an Employee’s standard commute when traveling between their residence and the College. The College will reimburse Employees at the current rate approved by the IRS on the date of travel. Employees should ensure they are on the approved drivers list for the College prior to a trip by contacting the Human Resources Office. An Employee’s personal automobile liability insurance is the primary coverage when using a personal vehicle on college-related business. If the liability limits become exhausted following an accident occurring while on college-related business, the College’s policy provides a second layer of coverage.
College-Owned Vehicles (including electric carts): These vehicles are subject to additional rules pertaining to use. Gasoline purchase receipts will be reimbursed, not mileage. Employees must ensure they are on the approved drivers list for the College prior to a operating a College-owned vehicle by contacting the Human Resources Office.
Rental Vehicle: Employees may rent a vehicle when: driving is more convenient than airline or rail travel; driving is necessary to transport large or bulky materials; driving is more economical than public transportation modes due to multiple locations to visit in the destination city; or other surface transportation is not practical. Employees should ensure they are on the approved drivers list for the College prior to renting a vehicle by contacting the Human Resources Office.
Rental Vehicle Insurance Coverage: The College’s automotive insurance policy provides primary liability coverage (or secondary coverage behind the rental car company in certain states) for pre-approved Employees. It is not necessary for pre-approved Employees to purchase additional liability insurance from the rental car company. Comprehensive and collision losses are not covered by the College’s automotive insurance policy. The College purchase card will provide primary comprehensive and collision coverage when the card is used for renting a vehicle. Employees are encouraged to use a College purchase card for rental vehicle purposes, when available. Employees not using a College purchase card should purchase comprehensive and collision coverage from the rental car company when renting a vehicle. Employees not on the authorized driver list expose their personal liability insurance as primary insurance coverage.
Ground Transportation, Parking Fees & Toll Charges: Preferred choices for ground transportation are shuttle service, public limousine service, or other forms of public transportation. Travelers should use prudent judgment in choosing ground transportation.
Lodging: The College will reimburse lodging accommodations for Employees traveling on College business. Prudent judgment should be used when selecting lodging accommodations. The detail hotel folio is required as substantiation for reimbursement.
Telephone: The College will reimburse reasonable expenses incurred for telephone, fax, and teleconference for business communications for Employees traveling on college-related business. Employees who receive a cell phone allowance are expected to use their personal cell phone to the extent possible. Personal calls home are reimbursable, though prudent judgment should be used when determining the number and length of the calls.
Personal Meals While Traveling: Personal meals are meal expenses incurred by an individual dining alone while traveling overnight on College business or by an Employee who has paid the bill for other Employees who are traveling overnight with the individual on College business. The College will either reimburse actual expenses or provide a per diem allowance for meal and incidental expenses for Employees traveling overnight on college-related business based on the guidance below. Employees must choose one of the two approved methods for each trip and may not combine the two methods when requesting reimbursement.
Method 1: Actual Expenses
The College will reimburse reasonable expenses incurred for meals when traveling on college-related business, however the total amount submitted for reimbursement each day normally should not exceed the federal per diem rates referenced below. If two or more Employees dine together, the senior level Employee is responsible for paying the bill and seeking reimbursement. Both a detail statement displaying all items ordered and evidence of payment in the form of a credit card sales draft or cash register receipt shall be submitted for reimbursement. If a detail statement is not available, a reasonable explanation shall be provided. For reporting purposes, purchases of alcohol must be segregated from other food items and charged to spend category “S0513 Alcoholic Beverages.”
Method 2: Per Diem Allowance
In lieu of submitting actual receipts for meal and incidental (M&I) expenses while traveling, Employees may request daily reimbursement at the approved per diem M&I rate established by the U.S. General Services Administration (GSA) for domestic locations or the approved per diem M&I rate established by the Department of State for foreign locations, for each day while traveling on college-related business. The reimbursement allowed for the first and last day of travel is limited to 75% of the daily rate. Employees are required to reduce their daily per diem reimbursement request for meals provided by another source (i.e. meals included at a conference, provided by another individual, etc.) by the component rate(s) listed at the websites below. No receipts are required when requesting reimbursement under the per diem allowance. Due to budgetary constraints, departments may choose to limit or disallow the use of the per diem allowance.
Approved Per Diem Rates: The M&I per diem rates differ by travel location. Please visit https://www.gsa.gov/travel/plan-book/per-diem-rates to view the current M&I per diem rates by travel location for domestic locations. Please visit https://aoprals.state.gov/web920/per_diem.asp to view the current M&I per diem rates by travel location for foreign locations.
Dependent Care Expenses for Faculty Traveling to Professional Conferences and Workshops: Faculty may use their individual faculty account (IFA) to pay for dependent care during travel to professional conferences and workshops. Receipts for dependent care must include the name and address of the provider, in addition to the tax ID of the organization or social security number of the individual providing care. Reimbursements to faculty members for dependent care assistance may be reported on the faculty member’s Form W-2 and in certain circumstances, may be included in the faculty member’s taxable income.
Business Meals and Entertainment Expenses: Business meals are meals taken during which a specific College business discussion takes place. When more than one College Employee is present during a meal, the senior level Employee is responsible for paying the bill and seeking reimbursement. Supporting documentation submitted for reimbursement must list the individuals or group in attendance, their business affiliation, and summarize the college-related business discussed, including specific employee appreciation if applicable. Both a detail statement displaying all items ordered and evidence of payment in the form of a credit card sales draft or cash register receipt shall be submitted for reimbursement. If a detail statement is not available, a reasonable explanation shall be provided. For reporting purposes, purchases of alcohol must be segregated from other food items and charged to spend category “S0513 Alcoholic Beverages.”
Reimbursement of Canceled Travel During COVID-19: Travel during a pandemic presents unique circumstances that may require you to cancel travel unexpectedly. For example, you cannot travel if you are experiencing any COVID-19 symptoms or are in isolation or quarantine. Your home location or travel destinations’ health conditions may change between booking and traveling such that your travel is no longer permitted by health authorities. Because of these uncertainties, CMC has the following policies in place during the pandemic:
- If you are using College funds for travel, you are allowed to purchase travel insurance, which is reimbursable during the pandemic. The amount for travel insurance must fall within the available budget. Please verify that such insurance provides coverage for COVID related events before purchasing.
- Any individual canceling CMC-sponsored travel that would have been otherwise reimbursable (and if not covered through travel insurance) must ask the airline or travel provider for a refund or a voucher for future travel. If a refund is not available, and cancellation fees are incurred, proof of the charges should be submitted with the reimbursement request. All reimbursement requests for canceled travel must include 1) appropriate documentation for the reason the trip was canceled and 2) evidence that the ticket was non-refundable/non-changeable. Credits or vouchers received for unused airline tickets, hotels, etc. should be used for future college business, if possible. If a credit is used for personal purposes, the individual must reimburse the College for the amount of the credit.
Other College Expenses: General College expenses, such as office supplies, should be paid for directly by the College via College purchase card or supplier invoice. Employees should not use a personal credit card for general College expenses, to the extent possible. Employees should not use a personal credit card for payments for services.
Non-Reimbursable Expenses
As noted above, expenses must be reasonable and have a legitimate college-related business connection - that is, you must have paid or incurred deductible expenses while performing services as an Employee of the College.
The following is a general list of non-reimbursable expenses; this list is not all-inclusive:
Travel:
- additional expenses of a spouse or person accompanying an Employee while traveling, unless a valid business purpose exists
- airline class upgrades
- the cost of memberships in athletic clubs, social clubs, fraternal orders, buying clubs, or other similar organizations
- house sitting or pet sitting expenses
- babysitting expenses, except those associated with a faculty member’s travel to a professional conference or workshop
- lost or damaged personal items (e.g., cell phone, PDA, briefcase, calculator, computer, etc.)
- medical expenses (e.g., co-pays, prescription or over-the-counter medications, etc.)
- personal vehicle expenses (e.g., car washes, maintenance, fuel, etc.)
- traffic, parking, or toll violations
- non-college related sightseeing or other personal side trips
- personal care items (e.g., toiletries or haircuts/styling, etc.)
- personal entertainment (e.g., books, magazines, newspapers, hotel room movies, sporting events, etc.)
- mileage for travel between personal residence and the College
- laundry services on trips less than four consecutive business days
- expenses that have been, or will be, reimbursed to the Employee by another organization
Day-To-Day Expenses:
- library fines
- lost or damaged personal items (e.g., cell phone, PDA, briefcase, calculator, computer, etc.)
- academic regalia
- cell phone accessories
Entertainment and Alcohol:
- alcohol purchases for consumption by students
- meals for spouses and significant others, unless:
- the event is explicitly intended and justified as a social event, or
- the presence of a spouse or significant other is intended, and justified in the request for reimbursement, as serving a legitimate College business purpose (e.g., a spouse at a faculty recruitment dinner to inform the candidate and/or candidate’s spouse about the community, housing, employment opportunities, etc.)
Gifts to Staff, Faculty and/or Students:
- any gifts for faculty or staff members or students, or a member of the family of a faculty or staff member or student, except by Human Resources or for the following:
- de minimis incentives of not more than $25 in cash value provided to students acting in the capacity as a non-paid student volunteer (i.e., CMC logo items, ticket for admission to a movie, gift certificates redeemable for items at a local store, etc.)
- substantiation for reimbursement of de minimis incentives must include full names of recipients and explanation of the college-related business purpose
- gift expenses associated with birthdays, promotions, retirements, or other comparable occasions (except by Human Resources)
Reimbursement Forms
All Employees are required to submit an Expense Report in Workday for direct reimbursement, to clear a travel advance, or for expenses charged directly to a College purchase card. As noted above, reimbursement requests should be submitted within 60 days of when the expense was incurred or return from travel. Requests submitted beyond 60 days may not be reimbursed. Due to IRS requirements, any expense reimbursement submitted beyond 60 days of when the expense was incurred or return from travel will be added to the Employee’s taxable income and subject to applicable taxes/withholdings.
Travel Advances
Employees with a College purchase card are expected to use it to the extent possible when traveling on College related business. When a College purchase card is not available, employees may request a travel advance to cover the anticipated expenses of travel prior to an approved trip. Advances should be cleared within 60 days of return by submitting an Expense Report in Workday and all unused funds must be returned to the College within 120 days of return. Unused funds not returned within 120 days of return will be added to the Employee’s taxable income and subject to applicable taxes/withholdings.
Approved by CMC Senior Staff - January 10, 2008
Revised - September 1, 2016
Revised - September 13, 2017
Revised - March 1, 2018
Revised - July 1, 2020
|