Help CenterAn employer may reimburse you for travel and meal expenses incurred while performing services for the employer. The tax treatment of the reimbursement, including per diem allowances, depends on whether the employer has an “accountable plan” or a “nonaccountable plan.”
If expenses are reimbursed under an accountable plan, the employer deducts the amount allowable as travel and meal expenses, and you exclude the reimbursement from income.
If the expenses are reimbursed under an unaccountable plan, the employer reports the reimbursement as taxable wages to the employee on Form W-2 and takes a wage expense deduction.
Note: Only Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses may file Form 2106, Employee Business Expenses, to claim any unreimbursed business expenses due to the suspension of miscellaneous itemized deductions subject to the 2% AGI limit.
Continue reading: Expense Reimbursements for Employees 2021