Carnegie Mellon University

Business and Travel Expense FAQs

The Business and Travel Expense Policy (policy) provides departments, supervisors, employees and non-employees with specific information about and requirements for university business and travel expenses. Business and travel expenses include those that are directly paid by the university (e.g., purchasing card or purchase order), as well as those incurred by individuals for university business and are submitted for reimbursement.

The emphasis of the policy is on business and travel expense reimbursements as business and travel expense reimbursements must follow the Internal Revenue Service (IRS) accountable plan rules. Business and travel expenses, including amounts allowable as per diems, that are reimbursed following the IRS accountable plan rules are not included in the individual’s income for U.S. federal personal income tax purposes or subject to employment taxes (e.g., social security taxes).

Like all purchases, business and travel expense purchases must comply with all other applicable university and/or department policies, guidelines and requirements governing the relevant expenditure.

All university funds, regardless of source, must be expended in a reasonable and prudent manner and only for business related activities that support the university’s educational and research mission. This includes, but is not limited to, discretionary accounts, federally and non-federally funded external sponsorships and programs, etc.

An IRS accountable plan is an employee reimbursement allowance arrangement or a method for reimbursing employees for business and travel expenses that comply with IRS regulations. Maintaining an accountable plan in compliance with IRS regulations prevents employee expense reimbursements from being treated as taxable income for U.S. federal income tax purposes. The university’s Business and Travel Expense (BTE) Policy meets the requirements of an IRS accountable plan.

The main IRS regulations that detail accountable plan requirements are:

  • Treasury Regulation § 1.62-2 (26 C.F.R. § 1.62-2), Reimbursements and other expense allowance arrangements
  • Treasury Regulation § 1.162-1 (26 C.F.R. § 1.162-1), Business expenses
  • Treasury Regulation § 1.162-2 (26 C.F.R. § 1.162-2), Travel expenses
  • Treasury Regulation § 1.274-5 (26 C.F.R. § 1.274-5), Substantiation requirements

These regulations, along with the Internal Revenue Code (Title 26 of the United States Code), can be retrieved through the IRS website.

IRS accountable plan rules require that employees and non-employees account for all business and travel expenses, advances, and allowances.  The accounting must include:

  • Proper justification to establish a valid university business purpose of the travel or business expense, which must include the who, what, when, where, why/how for all expenses
  • Substantiation of the business and/or travel expense with required original receipts for all expenses of $75 or more
  • Return of any excess reimbursement or allowance within a reasonable period of time

An excess reimbursement is the amount of reimbursement you have received in excess of the amount of university-related business and travel expenses for which you have properly accounted.    

Examples:

  • If you received a travel advance and you didn’t spend all the money on business-related expenses or you don’t have proof of all your expenses.
  • If you received a duplicate payment for the same expense(s).

 Under the accountable plan, you are required to return any excess reimbursement or other expense allowances for your business expenses to the person paying the reimbursement or allowance. You must write a check and/or money order made out to 'Carnegie Mellon University', attach a completed Accounts Payable Deposit Form [.pdf], and provide to Accounts Payable as soon as possible.

The university is required to retain university financial records as necessary to meet business needs and to comply with legal standards. The Financial Records Retention Policy for the university outlines the length of time that receipts are required to be kept. The length of time for different types of receipts varies.

Under the IRS accountable plan rules, the IRS requires documentary evidence for expenses $75 or greater. Therefore, the university is not permitted to set a receipt threshold higher than $75.  Some departments may follow more stringent guidelines for budgetary and control purposes.  For expenses funded by a sponsored award, the receipt threshold may be more stringent as a result of sponsor requirements.

Departments have the deepest knowledge on their business, sponsor requirements and budget availability.  It is the university’s desire to have an IRS accountable plan compliant policy, use university funds as judiciously as possible, and streamline decision-making and processes.  Therefore, the policy allows for purchasing decisions (e.g. upgrades for air transportation and car rentals, fees for excess baggage) to be made at the department level instead of requiring designated departmental finance representative (DDFR) approval.

The designated departmental finance representative (DDFR) is designated by the department, college, and/or division as an appropriate approver for policy exceptions. The Finance Division Controller’s Office must be notified by the department, college and/or division of its DDFR. For some divisions, the DDFR is the Administrative Leadership Group (ALG) representative. Other divisions have assigned the DDFR responsibility to department personnel.  Refer to the DDFR Listing [.pdf] to locate your DDFR.

Individuals should consult with their applicable departments in regards to their department specific DDFR approval process.  

A comparison of expenses is suggested when an exception to the policy is being requested and/or when justification outside of what is typically expected or permissible needs to be supported.  For example, if a traveler would like to choose an airline ticket that is in excess of the lowest coach ticket price, then the traveler should provide a comparison of the lowest coach itinerary and ticket price and the requested ticket itinerary and price along to the appropriate approver (e.g., supervisor, budget approver, DDFR, etc.) prior to purchase and that comparison should be maintained as support for the transaction. 

The University Copy Center is available to help colleges and departments with options for printing, scanning, and faxing needs, along with charging requirements.  Colleges and departments may consider reducing the number of smaller, individual units for centralized, higher volume machines.

Individuals are responsible for seeking reimbursement for expenses payable by external organizations. If an individual is taking a trip that will be paid by both the university and an external organization, the university will pay its’ agreed upon share of the actual expenses necessary for university business. When an external organization pays for actual expenses incurred for lodging or meals, the individual may not claim per diem. The reimbursement received by the individual from all sources can never exceed the total expenses incurred by the individual.

When expenses are being shared with external organizations and the expense report justification field contains a detailed explanation of which organization is paying the balance of the expenses, a duplicate copy of the receipts will suffice for reimbursement.

Generally, no you will not be taxed. This special case would need to be documented and approved by your DDFR. The university reviews expenses submitted 90 days after the expenditure date and confirms extraordinary circumstances before subjecting the reimbursement to taxation. The internal component of the expenses should be submitted as soon as possible after external payment.

These costs may be covered under the university’s Communication Allowance Guidelines [.pdf].

If an individual does not receive a communication allowance and has a business requirement that causes the individual to incur communication costs, the individual can submit an expense report that includes the following information, for example:

  • Date:  08/01/08
  • Time:  6:00 PM
  • Names of all individuals participating in the phone call:  Suzie Smith and James Bower
  • Detailed business purpose of call: Discussion on discount structure available to university faculty and staff with regards to the new Communication Allowance Guidelines being implemented across campus. 
  • Detailed explanation of business relationship with all participating parties on the call:  S. Smith is the university's point of contact at Verizon for wireless services and J. Bower is the associate director of Procurement Services who handles the relationship between the university and Verizon.  

If an individual receives a communication allowance, the individual is typically not eligible for additional or further reimbursement for communication costs, except in extenuating circumstances.

You may seek reimbursement for the cost of business phone calls. To obtain reimbursement, a documented business purpose must be provided for each phone call.  Otherwise, any reimbursement (if approved) will be considered taxable to the individual because it does not meet policy and IRS accountable plan requirements.    

Visit the Procurement Services travel page for a listing of preferred travel providers. Contact cmutravel@andrew.cmu.edu for questions.

To assist university travelers, the university entered into agreements with several preferred travel agencies that provide the university with competitive fares, high quality service, and convenience for university travelers. These travel agencies are set up to direct bill the university for the cost of the airfare and other travel related expenses, rather than the individual paying the cost personally and needing to be reimbursed. Travelers are encouraged to arrange and pay for travel through a preferred travel agency. 

If there is a need to utilize a non-preferred travel agency for small business purposes or other reasons, please contact Procurement Services at procurement-inbox@andrew.cmu.edu.

The latest information on the university’s preferred travel agencies can be found on the Procurement Services travel page

No. Travelers may personally retain frequent flyer plan rewards or other bonuses that may accrue from business travel. However, in no case may the traveler choose a reservation at a higher cost in order to accumulate additional plan rewards or other bonuses. In addition, the university will not purchase frequent flyer miles from travelers or reimburse them for tickets purchased with frequent flyer miles.

For any medical related issues, contact Human Resources.

There must be a business reason for this expense and it must be approved by the DDFR.

The following costs are considered reimbursable when acquiring a U.S./international visa in accordance with the policy and, if applicable, is in compliance with all sponsor requirements/federal regulations:

  • Travel to and from the location where the visa is to be obtained
  • Lodging cost for one night at the location where the visa is to be obtained
  • Any direct business expense incurred during travel to the location where the visa is to be obtained

Employees should also be advised that such travel should coincide with other university-related business travel when possible to minimize the costs incurred for obtaining the visa. 

No, employees will not be reimbursed for expenses paid with a gift card.

All expenses must be for a valid university business purpose as a condition to receiving reimbursement for the expense under the policy. The university will not reimburse or pay for expenses that are inherently personal in nature. Below are some examples of personal expenses including, but not limited to:

  • Personal grooming services, such as barbers, hairdressers, toiletries, and shoe shines
  • Child care costs, babysitting, and house-sitting costs
  • Pet care, including fees for boarding pets and other animal care
  • Any personal clothing and accessories
  • Prescriptions, over-the-counter medication, and other medical expenses
  • Personal reading material, such as non-scholarly magazines, books, and newspapers
  • Personal recreation or entertainment such as greens fees, sightseeing fares, theater tickets, entry fees, lift tickets, etc.
  • Credit card delinquency fees and finance charges
  • Dues in private clubs
  • Airport airline club memberships and dues
  • Gym and recreational fees, including massages, manicures/pedicures, and saunas
  • Amenities such as movies, in-room bars, saunas, massages, etc.
  • Personal insurance costs such as life insurance, business travel accident insurance, personal automobile insurance, and baggage insurance
  • Lost baggage, including items lost by the airlines, stolen or otherwise damaged
  • Loss or theft of travel advance money, airline tickets, personal funds, and other personal property
  • Any incremental costs associated with personal business
  • Automobile repairs or loss/damage to personal automobile
  • Credit card annual fees
  • Employee commuting expenses
  • Parking tickets or traffic violations.
  • Upgrades to hotel rooms for personal convenience
  • Any fraudulent expense
  • Other personal expenses

Airbnb is permissible as long as the expense does not result in a greater expense for the university. Travelers are required to attach an itemized receipt as required by the policy for these expenses.  

The following can be utilized for further information in regards to these procedures: