My husband receives a standard reimbursement amount for each day he is out of town and for travel back and forth. That shows on his paystub as reimbursement & per diem pay and is not taxed. My question is, he often saves money by buying his own food, staying with friends, etc and doesn't use all of his reimbursement, nor is he required to turn in receipts. Can we claim the excess amount as income and pay tax on it? Also, if we do that would that cause problems for his employer, or are they covered by using the standard reimbursement and per diem rates, which is 50 cents a mile, $75 for hotel and $25 for food per day.
The expense reimbursement process allows employers to pay back employees who have spent their own money for business-related expenses. When employees receive an expense reimbursement, typically they won’t be required to report such payments as wages or income.
Employers have two options for reimbursement of employee business expenses. For accountable plans, the reimbursement or excess amount is excluded from income and is not subject to withholding taxes. In non-accountable plans, the reimbursement or excess amount is included in income and subject to withholding taxes.
@techymomof6 wrote:Can we claim the excess amount as income and pay tax on it?
Are you really saying you WANT to report it as income and pay tax on it?
At any rate, no, it is nontaxable income. You can not choose to claim nontaxable income is actually taxable.