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Meals | Telephone | Registration Fees | Non-reimbursable Expenses
Access to Funds | Travel Expense Report | Grant Travel
Corporate American Express
The Internal Revenue Service (the IRS) has issued publication 463, Travel, Entertainment, Gift and Car Expenses that describes the underlying regulations in Section 162 of the Internal Revenue Code (the Code). The Code is the basis for the Hobart and William Smith Colleges' (the Colleges) Travel Expense Reimbursement Guidelines.
In the regulations, the IRS states that ordinary and necessary business related expenses are deductible and reimbursable. The IRS defines ordinary as "common in your field of trade, business or profession"; and necessary as "helpful and appropriate for your business". The IRS states that meals, hotels and entertainment expenses cannot be "lavish or extravagant". The IRS requires all businesses (for profit and not-for-profit) to reimburse employees for travel and entertainment expenses under "an accountable plan". For a plan to be deemed "accountable":
To be in compliance with IRS regulations, the Colleges have prepared the following accountable travel expense reimbursement plan. This document has been reviewed and approved by the President and Senior Staff. These guidelines apply to all of the Colleges' employees traveling or incurring expenses for the purpose of conducting the business of the Colleges. Travel expenses incurred by any employee which are funded by federal grants must also comply with federal travel regulations as outlined in individual grant proposals, budgets, and other grant guidelines and in OMB Circular A-21.
The Colleges will reimburse the cost of airplane tickets in coach class only. All efforts should be made to obtain the lowest, coach fare available. This usually requires booking 14 to 30 days in advance and a non-refundable ticket. In the event a non-refundable ticket has to be canceled, the airlines will charge a fee and issue a credit that has to be used by that employee within the year. Penalties can be quite high. The benefit of locking into a fare should be weighed against the risk of having to make changes in travel plans before purchasing a ticket. If a penalty is incurred due to cancellation, the Department Head must approve reimbursement/payment of that amount.
For electronic tickets, please request a receipt when obtaining boarding passes. When using a kiosk or on-line check in, a receipt may be requested. If that is not possible, submit the web page printout or confirmation letter that is e-mailed to the employee AND the boarding passes for each leg of the trip. For paper tickets, please provide the last page of the airline ticket (passenger receipt) as receipt for the trip. It is important that documentation is submitted that shows the name of the person traveling, the destination and the cost of the ticket, including proof of payment (e.g., a receipt indicating the use of a credit card to make payment.)
Most airlines have instituted and strictly enforce rules regarding the number, size and weight of bags allowed for each passenger. Employees should be aware of these rules and make sure they are in compliance with the rules. Extra baggage charges and charges for personal items (e.g. golf clubs) will not be reimbursed by the Colleges.
Travel Agencies and Ticketing Fees
The Colleges do not have an "official" travel agent. Employees are free to choose the travel agent they wish to work with or deal directly with the airlines/hotels or purchase transportation/lodging online. It is now common practice for travel agencies to charge a fee for their service. Employees should be aware of this fee, as it can be quite high. Employees should weigh the fee against the expense of doing the travel research on their own and other benefits provided by the travel agent. Reasonable effort should always be made to find the lowest possible airfare.
When attending a conference or professional meeting, employees should check the group airfare rate negotiated by the event sponsor. Often, these group rates are quite a bit lower than fares that can be obtained directly from the airlines or through a local agent.
Discounts are often available through AAA, AARP and other personal and professional organizations. The Colleges cannot pay for personal memberships, but, if these discounts are available the Colleges encourage the employee to use them and appreciate the effort to minimize travel costs.
Support Staff Travel
In certain circumstances support staff may be required to be compensated for time spent while traveling on behalf of the Colleges (getting to and from a conference or a meeting location). Please consult with Human Resources on this important compensation issue.
Spousal or Companion Travel
The payment for a spouse traveling on business is closely regulated by the IRS. The IRS requires a "bona fide business purpose" for the spouse to be on the business trip for the expenses to be reimbursable. A Senior Staff member must approve any spousal travel at the Colleges. Documentation of the spouse's business purpose must be clearly documented on all travel forms. In the specific circumstance where non-business spousal travel is approved the cost will be treated as taxable income to the employee. In the event a spouse, companion, child, etc. travels with the employee any increased costs must be paid by the employee (e.g. double vs. single occupancy, meal costs, etc.).
Frequent Flyer Miles
Employees may retain frequent flier miles earned while traveling for the Colleges, however, employees must always travel on the least expensive airline, not the airline with which they have a frequent flier relationship. Excess cost due to the use of an employee's preferred airline will not be reimbursed. It is inappropriate for the Colleges to "pay for" or "buy" employee frequent flier tickets. If an employee uses a frequent flier ticket for business travel they cannot be reimbursed for it in any way.
Saturday Night Stay
When the savings generated by traveling and staying over a Saturday night exceed the cost of lodging and meals for a pre- or post-business period, the Colleges encourage the employee to make the Saturday night stay. Entertainment and other personal expenses (including health club fees) incurred by the employee during this period, or at any other time, will not be covered by the Colleges. Please provide a worksheet showing the airfare with and without the Saturday night stay and the hotel/meal costs for the additional days to document the savings.
The Colleges will reimburse for the cost of coach transportation. In the rare circumstance where there is a health or business reason why an employee must upgrade to business class, such an upgrade must be approved by a Senior Staff member and must be documented.
Currency Exchange and ATM Fees
The Colleges will reimburse employees for currency exchange fees. Employees are encouraged to pay for meals, hotels and purchases on their corporate credit card as the cards often offer the safest and most economical exchange conversion. The Colleges discourage employees from carrying large amounts of cash while traveling. In most cases, using an ATM machine will provide an excellent exchange rate and will reduce the amount of cash the employee has on his/her person. ATM fees for cash withdrawals will be reimbursed. Traveler's checks are a good, safe method of bringing money on a trip although the fees involved with obtaining traveler's checks can be high; when the use of travelers' checks is necessary, any associated fees are reimbursable.
Depending on the circumstances surrounding the employees' business travel, the employee may:
The Colleges will reimburse transportation costs for travel to a destination to conduct the business of the Colleges. An employee can either rent a car through a commercial rental agency or the Colleges will reimburse for business miles driven in a personal vehicle at a rate determined annually by the Vice President for Finance. The Colleges' vehicle pool is an additional option for certain travel circumstance as outlined in the Vehicle Pool Guidelines. To obtain mileage reimbursement, a travel report must be completed stating the destination and actual mileage traveled. Mileage reimbursement may never exceed the cost of available alternate transportation, e.g. the reimbursement for mileage cannot exceed the lowest train or airfare available. In cases where the employee elects to drive rather than travel by plane or train, the lower of the available alternatives will be reimbursed to the employee. Employees cannot request mileage reimbursement and charge for gas or other vehicle related expenses. The mileage rate paid by the Colleges includes reimbursement for such expenses.
Employees should rent a car only when it is required for daily use at the business destination or there is no other less expensive means of transportation from the airport/train station or from the point of origin to the business destination. If an employee rents a car for one week and uses the car partially for business and partially for personal use, the weekly cost of the car must be prorated. Employees should rent a car of an appropriate size based on the number of employees traveling. You are advised to investigate the fuel policy of the rental agency to avoid excessive refueling charges upon return of the automobile.
Transportation To/From Airport at Business
In many cases the cost of an individual taking the airport shuttle to their hotel is often far less than the cost of that individual riding in a cab. When time permits, individuals should explore utilizing airport/hotel shuttles.
When airport/hotel shuttles are not available the cost of a taxi will be reimbursed. Limos and other luxury vehicles will not be covered.
The Colleges will reimburse the actual cost for average accommodations up to the single occupancy rate. The IRS states that expenditures for lodging cannot be lavish or extravagant.
Movies and other entertainment charged to the room will not be reimbursed. Health Club charges, golf, mini-bar and other personal services will not be reimbursed. When traveling with a companion the employee is responsible for any additional charges above single occupancy.
A detailed, $0 balance due, itemized bill from the hotel must be submitted as supporting documentation for reimbursement. In addition, the detailed bill for any restaurant expenses charged to the room must be submitted.
When it is convenient and preferred by the employee, staying with friends can save the Colleges money. When approved by the Department Head prior to the trip, the reasonable cost of a gift or a meal in return for such hospitality is reimbursable. The cost of such gift or meal must be supported by a receipt and clearly explained on the travel report. The cost of the meal or gift plus any additional transportation costs must never exceed the cost of standard accommodations at the business destination, nor can a "cash payment" be made to the host.
Meals for employees while traveling for business purposes for the Colleges or while conducting the business of the Colleges will be reimbursed. Meal costs for business related participants will also be reimbursed. The location of the business meal does not change the reporting requirements. The same IRS rules apply to meals taken locally or out of town. The IRS states that expenditures for meals cannot be lavish or extravagant.
Receipts should be requested for all meals, they are required to be submitted for reimbursement for meals over $25. The itemized receipt is required in addition to the credit card slip, if a credit card was used to pay the bill.
The Colleges will reimburse the reasonable and actual cost of meals, including gratuities, while on business. The Colleges will reimburse for breakfast, lunch and/or dinner when there is a business reason why the employee was unable to eat these meals at home during the normal mealtime.
The IRS requires that all requests for meal reimbursement must document the following information (regardless of cost):
The Colleges will not reimburse on a "per diem basis". When a meal is included in the cost of a conference, the Colleges will not reimburse the employee for the cost of a meal taken during that period (i.e. if employee chooses not to attend the provided lunch, the Colleges will not pay for an alternative lunch taken).
If an employee is dining out with a travel companion, only the cost of the employee's meal may be charged. Shared items must be prorated.
Employees are expected to act responsibly in relation to alcohol consumption while on a business trip. The cost of a beverage with dinner will be reimbursed as part of the meal expense. Drinks that are not associated with a meal, or drinks taken at a bar will NOT be reimbursed, except with a legitimate business development reason and approval by a member of senior staff.
Snacks and other incidental items
Snacks, mini-bar, and other incidental items such as magazines, toiletries, and medicine are considered personal items and are not reimbursable.
Local (in-town) meals
A "business meal" is defined as a meeting that is held during mealtime where the main purpose of the meeting is business and a meal is served. In the case where employees must meet during the dining hour to discuss business the cost of the meal will be reimbursed or may be charged to the Colleges. Routine get-togethers with associates are not considered business meals. Business meals must have a stated business purpose.
Tips at the standard of 15% to 20% on meals are reimbursable. Tips on meals should be included as part of the cost of the meal on the travel expense report. Reasonable tips to bellhops, maids, etc. are reimbursable and should be totaled and listed separately on the travel expense report.
All business calls (whether from a landline or a cellular phone) made while away from the office will be reimbursed. Reasonable calls to the home will also be reimbursed (i.e. one call per day of reasonable length). Direct long distance calls from the hotel room are extremely expensive and should be avoided. Employees are encouraged to use a calling card, phone credit card or cell phone. When an employee uses his/her personal phone calling card an accounts payable voucher should be submitted with a copy of the bill when received.
Internet access/access to Colleges'
In some cases it is critical for the Colleges' employees to have access to the Internet while away on business. The Colleges' have procedures that must be followed to insure access in the most secure and economical way. Employees should consult with the appropriate person in their department or with the Division of Information Technology for information on such access. Charges for Internet access outside of the Colleges' procedures may not be reimbursed.
Registration fees will be paid directly to the sponsor organization. An accounts payable voucher with the appropriate supporting documentation should be submitted for processing through Accounts Payable. Please allow enough time to process the accounts payable voucher and have your registration received by the deadline. If you must pay a registration fee directly and request reimbursement, a copy of your canceled check or a credit card receipt must be attached (this can be done through the travel reimbursement form.)
The following items will NOT be reimbursed by the Colleges:
Note: This list is not meant to be all-inclusive. Other items may be deemed non-reimbursable upon review by the Business Office.
In general, the Colleges discourage employees from carrying large amounts of cash. The Colleges participate in a corporate credit card program to provide a means of charging business expenses. In the case where cash is required, employees can either use personal funds and be reimbursed or request a cash advance.
When traveling internationally, it is recommended that employees access funds through ATM machines. The ATM machine allows withdrawals in reasonable amounts of cash to be carried and often provide the most favorable exchange rates. The Colleges corporate credit cards do not allow cash withdrawals. Therefore, employees must arrange for funds to be deposited in their U.S. bank accounts and withdraw from those accounts with their personal ATM cards. The Colleges will reimburse the fee associated with the ATM withdrawals.
If the travel destination does not accept credit cards or the employee will not have access to ATM machines, the Colleges encourage employees to purchase traveler's checks. The fees to purchase traveler's checks are reimbursable. Discounts may also be available through AAA, credit union, or other personal or professional organizations.
Note: Special procedures for banking and access to cash for faculty and/or staff directing off-campus programs have been established. Please contact the Business Office or the Center for Global Education for information on these procedures.
When absolutely necessary, advances for the estimated cost of a business trip are available. Advances may be made up to 30 days before expenses are anticipated to be incurred. Requests should be made at least 14 days prior to the trip and the advance must be cleared within 14 days after returning from the trip. No new advance will be given until the previous advance is cleared. The IRS requires that advances must be cleared within 120 days or they are subject to taxation as income to the employee.
Advances should only be requested when it is not possible to charge business expenses to a credit card or have the Colleges billed directly. Advances should not be requested for small, miscellaneous amounts (i.e. cabs, tolls, etc.) Those expenses should be paid by the employee and reimbursed upon return from the trip.
To obtain a travel advance, complete a Request for Payment form on the web (or obtain a copy from the Business Office). Indicate that payment is for a travel advance. The department head, direct supervisor or authorized signer for the account to which the expense will be charged must approve advances.
To obtain reimbursement for out of pocket travel expenses (those NOT directly billed to the Colleges) complete either the Domestic Travel Reimbursement Form or Foreign Travel Reimbursement Form on the web (or obtain a copy from the Business Office). Travel reimbursement forms must be completed within 14 days of the return date of your trip and submitted with the required documentation to the supervisor, Department Head or authorized signer on the account to which expenses will be charged. The completed form with appropriate approval signatures should be submitted to the Accounts Payable office. Faculty using funds from the faculty travel account, and faculty recruiting accounts must send their form to the Provost's Office for approval. The Provost's office will complete the account number portion of the travel reimbursement form and deliver the form to accounts payable. When a refund is due to the Colleges a check must be attached to the travel form. When a refund is due to the employee a check will be generated within 14 days of receipt of the travel reimbursement form.
Faculty and staff members with grants that provide support for travel expenses should adhere to the travel guidelines as outlined in their particular grant and in the OMB Circular A-21, if the grant is from a federal source. Unlike travel funded by the Colleges:
A faculty or staff member traveling for at least 30 consecutive days may elect to take a per diem reimbursement for food and shelter expenses. The reimbursement rate is established by the IRS and varies from city to city for an extended period of time on a federal grant.
ALL travel and entertainment expenses, regardless of dollar amount, must be documented and supported by original receipts.
Foreign travel is strictly limited. Grants must be carefully reviewed to determine if foreign travel is allowed and/or if travel on a foreign carrier is allowed.
It is your responsibility to settle charges to your Corporate American Express Card. Submit expenses charged to the card as indicated in the above guidelines. Fees for items such as late payment, interest and penalties are not reimbursable by the Colleges. If there is a charge on your statement that you do not agree with (incorrect charge, unauthorized charge, service dispute) please call American Express directly at 1-800-528-2122. They will work with you to dispute the charge.
American Express offers reward points for charges to corporate credit cards. There is a cost to enroll in this program. If an employee chooses to enroll, they must pay the annual fee - the fee is not reimbursable or payable by the Colleges. To enroll, please contact American Express Membership Rewards at 1-800-AXP-EARN or visit their website.
The Corporate American Express card is never to be used for personal charges.
Report a lost or stolen card to American Express at 1-800-528-2122 immediately. Upon termination of employment with the Colleges, the American Express card must be turned in to the Business Office.
Inappropriate use of the Corporate American Express Card may result in termination of your participation in the Corporate Card program.