In order to comply with IRS regulations, beginning on July 1, 2018, employee expense reports submitted to an Approver more than 60 days after the trip or last purchase date will be reported as taxable income for the employee being reimbursed and subject to applicable payroll taxes.  

UC Travel Regulations Policy G-28 and Expenditures for Business Meetings, Entertainment, and Other Occasions BUS 79 require employees to submit expense reports within 45 days of the completion of a trip or event. Submitting your expense reports within the required 45 days will ensure your reimbursement will not be taxed. 

Timely reporting and submission of expense reports is the responsibility of the employee being reimbursed regardless of whether the employee self-submits or has designated a delegate for expense reporting.

Impact for Employees

• Individuals will continue to be reimbursed.
• Individuals should submit expense reports within the 45-day UC policy limit to allow sufficient time for review and approval, and to avoid tax consequences.
• Beginning on July 1, 2018, expense reports submitted to the Approver more than 60 days after the completion of the trip or last purchase date will be reported as taxable income to the employee on their paycheck, and federal and state income taxes and other mandatory taxes will be deducted.
  • For monthly recurring expenses submitted quarterly, expense reports submitted to the Approver more than 60 days after the last day of the quarter will be reported as taxable income to the employee.

Impact for Approvers

• Approvers should continue to approve expense reports in a timely manner.
• Approvers should confirm that the date entered in the MyExpense “End of Trip/Last Purchase Date” field is accurate and matches submitted documentation.

Background & Transition Process

In the October 2015, the  Controller’s Office Newsletter highlighted the policy change that shortened expense report due dates from 60 to 45 days and the potential of reporting payment for late expense reports as taxable income.  Since then, the Controller's Office and Supply Chain Management have been monitoring submission of expense reports and have been working with individuals and departments who submit late reports. Despite our efforts, we continue to receive late expense reports.  

On April 1, 2018, a new field, “End of Trip/Last Purchase Date,” was added in MyExpense to support accurate identification of late expense reports.

In order to ease transition from the current process to the new process, the Controller’s Office implemented these tax reporting changes on July 1, 2018. Expense reports submitted prior to July 1, 2018, that are more than 60 days after completion of the trip or last purchase date will not be reported as taxable income.

To increase awareness of the changes, from April 1, 2016 through June 30, 2018, Accounts Payable notified employees who submit a late expense report and their final approvers of the upcoming taxability to late expense reports. At this time students, affiliates, guest travelers, and other non-employee expense reports are not subject to these IRS guidelines.

Please distribute this information to your employees who are reimbursed for expenses and their Preparers and Approvers. Contact the Supply Chain Management Response Team if you have any questions about this change.