- 16 - Regulatory Framework The first requirement for an accountable plan is that the expense must be allowed as a deduction under section 162(a). Sec. 1.62-2(d), Income Tax Regs.; see also sec. 62(a)(2)(A). If an expense satisfies this threshold requirement, it must be scrutinized under the regulations implementing section 62(c) to determine whether it was paid under a plan that qualifies as a “reimbursement or other expense allowance arrangement”. Sec. 1.62-2(c), Income Tax Regs. Under section 1.62-2(c)(1), Income Tax Regs., a deductible expense is paid under a qualifying “reimbursement or other expense allowance arrangement” if the arrangement meets the requirements of paragraph (d) (which incorporates the business connection requirement of section 62(a)(2)(A) into the regulations implementing section 62(c)), and paragraphs (e) and (f) (which implement the substantiation and return of excess requirements of section 62(c)). Sec. 1.62- 2(c)(2)(i), Income Tax Regs. If the “reimbursement or other expense allowance arrangement” meets these requirements, it qualifies as an “accountable plan”. Sec. 1.62-2(c)(2)(i), (4), Income Tax Regs. Section 1.62-2, Income Tax Regs., simplifies employees’ reporting requirements by providing that amounts paid under an accountable plan are excluded from the employee’s gross income, are not reported as wages or other compensation on Form W-2, WagePage: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011