Reimbursement for temporary lodging

[dailytam]

I am a university faculty member. I taught a course in Europe for 5 weeks during the summer for an organization that has a contract with my home university. My salary and transportation were paid by this organization. My lodging was not paid by that organization. I also have an endowed professorship at my home institution with funds to be used by me for my professional development. After being reimbursed for my lodging abroad from my professorship account, I was informed that this was not permissible because it was taxable income and that I have to return the money.  Is my reimbursement for temporary lodging while teaching abroad actually taxable income?

[Carl]

Is my reimbursement for temporary lodging while teaching abroad actually taxable income?

Yes it is. If this expense was incurred in 2017 *and* you were "reimbursed" in 2017, the taxability of the reimbursement can be offset by claiming your lodging expenses as work related. They would qualify as such if your time is Europe teaching was a condition of your employment or continued employment. However, for your work related expenses to actually impact your tax liability, the total of all your work related expenses would have to exceed 2% of your AGI, and the total of all your itemized deductions on SCH A (which includes your work related expenses) would have to exceed your standard deduction.

Now if this occurred in 2018 then work related expenses are no longer deductible for a W-2 employee. So if you were reimbursed from your fund in 2018, it doesn't matter if the expenses were incurred in 2017 or 2018, The reimbursement is taxable income to you and should be included in box 1 of the W-2 you will receive next year, for your 2018 income.

[Carl]

I just remembered something else. I matters also if your employer's reimbursement plan is an accountable plan, or non-accountable. Read about this in tax topic 514 at https://www.irs.gov/taxtopics/tc514 

Now I do know this topic applies to 2017 expenses and reimbursements. I can't say one way or the other if it applies for 2018 taxes, under the new tax laws where W-2 employee job related expenses are no longer deductible.