108 - University of North Carolina at Chapel Hill Policy on IRS Accountable Plan

University Policy


University of North Carolina at Chapel Hill Policy on IRS Accountable Plan



As an institution of higher education, the University of North Carolina at Chapel Hill ("UNC-Chapel Hill" or "University") follows the Internal Revenue Service’s (IRS) rules for advances, travel and business expenditures under Treasury Regulation §1.62-2 as discussed under Code §§62(c) and 274 and IRS Publication 463. 

Furthermore, the University follows the requirements listed in NC General Statute §138-6. Travel allowances of State officers and employees and in consideration of the North Carolina Office of State Budget and Management (OSBM) guidelines and regulations

An Accountable Plan allows an employer to reimburse employees on a non-taxable basis when certain requirements are met. These regulations relate to reimbursing employees for business expenses, where reimbursement is not counted as income. This reimbursement process is referred to as an “Accountable Plan”.


This policy applies to all employees (faculty, staff, student employees) seeking reimbursement or travel advance for authorized University business expenses, regardless of funding source or GL Business Unit.


Policy Statement

The University maintains an Accountable Plan following current IRS regulations. The Accountable Plan means that timely reconciliations will not be taxable to the employee. Reconciliation after 60 days will be taxable to the employee. After 180 days, the University will not reimburse expenses.

To meet the IRS Accountable Plan, specifically Treasury Regulations §1.62-2, the following conditions must be met:

  • All expenses must have a business connection. Specifically, all expenses must be incurred primarily for University business. Refer to “Expense Reimbursement Documentation and Supporting Information” section contained in Procedure 108.1 for further details.
  • The expenses must be substantiated and adequately accounted for within a reasonable time.
  • The IRS has defined the reasonable time to be within 60 days from when the expenses are paid or incurred.
    • For travel expenses, the trip end date and the date the claimant submitted their expenses for reimbursement will be used to determine if this requirement is met. Travel expenses paid for with a travel advance must be submitted within 60 days of the trip end date as well.
    • For non-travel expenses submitted via Concur for reimbursement, the date of purchase and the date the claimant submitted their expenses for reimbursement will be used.  For non-travel expenses submitted for reimbursement via Campus Voucher the date of the purchase and the date the voucher is submitted will be used. 
  • Any excess travel advance or reimbursement should be returned within a reasonable time by campus deposit to the Office of the University Cashier.
    • The IRS has defined the reasonable time to be within 120 days after the advance was disbursed or, in the case of a reimbursement, within 120 days after the expense was paid or incurred.

If these conditions are not met, the applicable amount may be reported to Payroll Services and treated as additional taxable income on the next available paycheck and on Form W-2. Taxes may also be deducted from the employee’s paycheck per applicable regulations and information on file which can result in FICA being charged to the employee’s funding sources.

Reimbursements submitted 180 days after expenses are paid or incurred will not be processed. Please submit and approve all requests timely.


Accountable Plan: a plan for reimbursing employees for business expenses.  Under this plan, the University is not required to treat a reimbursement as taxable income to the individual.

Business Expense: an expense incurred primarily for official University business. Business expenses must be necessary, appropriate to the activity, reasonable in amount, and serve a bona fide University purpose.

GL Business Unit: UNC-Chapel Hill and other separate legal entities, including Associated Entities, identified on the Chartfield String

Campus Voucher: How you record in ConnectCarolina that a payment is needed.

Concur: Web-based software solution for submitting Employee travel pre-approval requests, booking travel, and submitting expense reports. More information is available on the University's Concur webpage.

FICA: is the abbreviation for the Federal Insurance Contributions Act Taxes which are withheld from employee paychecks and matched by employers. FICA taxes fund Social Security and Medicare. On UNC-Chapel Hill paystubs, FICA taxes are listed as FED OASDI/EE (Social Security) or FED MED/EE (Medicare)

Itemized Receipt: A receipt that shows all the items, fees, and taxes that were purchased on a receipt.

Reasonable Period of Time: the University follows the IRS regulations to establish what constitutes a “reasonable period of time” for purposes of this policy.

Reconciliation: the process of providing receipts and business justifications for expenses to complete a reimbursement or advance process.

Travel Advance: Funds given to students before a trip to help with out-of-pocket expenses. Travel Advances can also be given to faculty/staff who are traveling internationally to help with out-of-pocket expenses.

W-2: is a wage and tax statement used to report wage paid and the taxes withheld from those wages for a given calendar year.

Web Travel: Web-based software solution for submitting student travel expenses for reimbursement as well as requesting student Travel Advances. Using the airfare option, Web Travel is also used to reserve, ticket, and pay for airline tickets for students and guest travelers. More information is available on the University's Travel Services webpage.

Voucher submission date: voucher created on date in ConnectCarolina

Frequently Asked Questions

Q: What if a student is requesting reimbursement for a student activity?
A: This policy does not apply to students acting in their student capacity.

Q: Does this policy apply if the reimbursement or travel advance is paid for by an Associated Entity business unit?
A: Yes. If the University determines that the expense is not necessary, appropriate to the activity, reasonable in amount, and for a bona fide purpose of the University or Associated Entity, then the University will not process the reimbursement or travel advance. Additionally, the timing rules discussed in this policy apply.

Q: How will I or my employee know when taxable earnings have been reported to payroll related to this policy?  
A: An employee will see the following earnings codes on their paystub which are related to the various business units mentioned in this policy:

Q: Does a reimbursement submission have to be approved within 60 days to avoid taxation?
A: No, if the reimbursement request is submitted for approval within 60 days of the date the expense was paid or incurred then the time to approve will not affect the taxable nature of the reimbursement. However, employees and administrators should ensure timely review, response and resubmission of reimbursement requests throughout the process as requests that age over 180 days may be denied.

Q: Does this policy apply to student travel which is for a student’s academic benefit? 
A: No, this policy only applies to student employees whose travel is for university benefit.  Travel for a student’s academic benefit should be processed as an Award via GradStar.

Paystub Earnings Description Business Unit Contact
Taxable Concur Reimbursement Travel Services Travel_team@unc.edu
Taxable Web Travel Travel Services Travel_team@unc.edu
Taxable Voucher Reimbursement Accounts Payable accountspayable@unc.edu

Related Requirements

External Regulations

University Policies, Standards, and Procedures

Contact Information

Accountable Plan

Contact: Controller

Telephone: 919-962-1370

Email: controller@unc.edu

Concur and Web Travel Advances/Reimbursements

Contact: Travel Services

Telephone: 919-962-0120

Email: travel_team@unc.edu

Voucher Reimbursements

Contact: Accounts Payable

Telephone: 919-962-0213

Email: accountspayable@unc.edu


Contact: Payroll Services

Telephone: 919-962-0046

Email: payroll@unc.edu


Contact: University Cashier

Telephone: 919-962-1368

Email: cashier@unc.edu


Article ID: 147974
Wed 11/8/23 9:35 AM
Thu 3/7/24 9:27 AM
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11/16/2023 12:00 AM
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11/16/2023 12:00 AM
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Finance and Budget