ES Tax FAQs
Are my employee expense reimbursement payments reportable?
In order for a payment to qualify as a reimbursement for expenses, the employer must maintain evidence the reimbursement reflects the actual expenses incurred. Reimbursement payments made without evidence are not considered expense reimbursements and should be included on your quarterly contribution report as wages.
Employee expenses reimbursements must:
- have a business connection to the expenditure;
- reflect the date, time, place, amount and the business purpose of the expense. (Receipts are required unless the reimbursement is made under a valid per diem plan.)
Reimbursements or allowances in excess of actual expenses incurred by the employee are considered reportable wages unless the employee returns the excess amount. Your travel policy should also list the above elements or travel expense will be considered reportable wages.