Vision Payroll

This week’s question comes from Luna, a business owner: I have employees who bicycle to work; can I reimburse them for their costs? Answer: §132(f) of the Internal Revenue Code has been amended by §211 of the Emergency Economic Stabilization Act (Public Law 110-343 or the “bailout bill”) so that effective with tax years beginning after December 31, 2008, employers may reimburse employees who “regularly [use] the bicycle for a substantial portion of the travel between [their] residence and place of employment” as long as the employee does not receive any other “qualified transportation fringe”. Costs to be reimbursed include “purchase of a bicycle and bicycle improvements, repair, and storage”. The limitation is $20 per month multiplied by the number of qualified commuting months. Contact Vision Payroll if you have any question on reimbursements for any qualified transportation fringe benefit.

Do you reimburse employees for travel and meal expenses? Reduce paperwork and substantiation requirements through the use of a per diem reimbursement. By using a per diem that does not exceed the applicable federal per diem rate for the area of travel, the amount of the expenses need not be substantiated although the employee must still substantiate time, place, and business purpose. There are two parts to the per diem allowance: the lodging portion and the meals and incidental expenses portion. Employees who incur expenses less than the per diem allowance are not required to return the excess amounts. Furthermore, ten percent or more owners and their relatives are ineligible to use the per diem method. Contact Vision Payroll if you have questions on per diem reimbursements.