This month, we implemented a new Workday enhancement to ensure compliance with the IRS 11-hour travel rule, which impacts reimbursements for meals during non-overnight, single-day travel.
Employees who are in travel status for fewer than 11 hours during a single-day trip will not receive reimbursement for meals. Reimbursements for employees travelling over 11 hours are subject to tax. Employees will begin to see these taxes applied to their travel reimbursements beginning July 1, and information for taxable reimbursements will be reported on their Form W-2.
Employer contributions will follow current costing allocations in Workday. Departments should monitor these expenses moving forward, and if changes are needed, complete necessary Payroll Accounting Adjustments.
Payroll Services will be retroactively collecting tax to correct travel reimbursements issued January 1, 2022 and forward. Travel reimbursements issued prior to January 1, 2022 are no longer valid for back-taxation and will not be impacted. Departments will be responsible for charges for employee and employer amounts for terminated employees with 11-hour taxable expenses.
Moving forward, employees submitting expense reports will notice a new step, in the form of an acknowledgement questionnaire, ensuring they understand possible tax implications for their travel reimbursement. This step will not apply to spend authorizations submitted prior to travel.