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New York State Accounting System User Procedures Manual

Volume Name
Section Name
Excess (Taxable) Payments to Employee-Overview

     Section 8.01 explains agency responsibilities for complying with IRS’ ‘accountable plan’ rules, including excess per diem and PCM reimbursements to employees, travel advances and non-overnight travel reimbursements. This Section also explains the CAS/Payroll interface (voucher processing and calendar year-end procedures) for employee business expense reimbursements, IRS’ one-year rule for travelers and employer-provided transportation benefits. For NYS to retain its accountable plan status and avoid penalties, agencies must continue to comply with these requirements. Any noncompliance may cause IRS to consider the State’s entire travel expense plan to be non-accountable and would result in subjecting all employee travel reimbursements to withholding of income and employment (Social Security/Medicare) taxes. IRS will assess penalties for failure to report or to withhold and pay taxes in accordance with these rules. Agencies will be responsible for any penalties assessed by IRS against NYS as a result of agency failure to comply.

     The applicable Federal reimbursement rates for travel expenses are contained in appropriate Accounting (A) bulletins and/or Procurement and Disbursement Guideline (G) bulletins.