Clickable staff directory icon.
Clickable forms icon.
Clickable org chart icon.
Clickable about us icon.

FAQ: Tax on Late Travel Reports

  • Do I have to originally submit my report within 60 business days or within 60 calendar days of my trip/event end date?
  • 60 calendar days. For example, if you return from your trip on January 1st, you must originally submit your report in AggieTravel before March 2nd.
  • I submitted my report on time, but it was returned for corrections and when I resubmitted the report it was more than 60 days beyond my trip/event end date. Will I be taxed?
  • The tax rule applies to reports that are originally submitted more than 60 days beyond my trip/event end date. As long as your report was submitted in AggieTravel within the 60 days following your trip or event end date, it will not be taxed per the IRS rules regarding late reports. If you receive a notice that this late report is generating imputed income, include the original (returned) Aggie Travel report number on your exception request.  
  • What will the tax rate be? How do I know how much I will be taxed when my report is originally submitted more than 60 days beyond my trip/event end date?
  • The tax rate will be the same as the tax rate of the employee's income, based on the W4 on file as well as the employee’s FICA eligibility. An employee can utilize the tax withholding estimator available through At Your Service Online to estimate income tax implications.   
  • How will I know the amount of imputed income?
  • The amount of imputed income will be generated directly from AggieTravel reports. You will receive specific notification, by email, of the amount of income imputed, and it will match your travel reports. Additionally, the imputed income will be reflected on your earning records with the payment code of "MV2". The code MV2 is utilized because it allows the imputed income to be reported correctly. Once the campus transitions to UC Path, a more general imputed income description will be available. 
  • Does this apply to professional expenses?
  • We will evaluate the applicability of this policy for professional expenses after June 30, 2019.
  • Is there a way of knowing which reports or expenses were taxable before the year is over?
  • Taxation occurs per pay cycle, not on an annual basis. You will be able to reconcile these to your AggieTravel reports.
  • What is exactly meant by “submitted” within 60 days?
  • The traveler must click the “submit” button in the AggieTravel report and the report must move onto the next step in the approval workflow.
  • I inadvertently submitted an AggieTravel Request instead of an Expense report and it sat for some time before I followed up on the payment status and realized I submitted the wrong document.
  • As the traveler, you are responsible to ensure your reports are originally submitted within 60 days beyond the trip/event end date. In a situation like this, you may apply for a one time exception to this tax policy, however, there is no guarantee that your request for an exception will be approved.  
  • Will university guests be taxed if their reports are originally submitted more than 60 days beyond their trip/event end date?
  • We will evaluate the applicability of this policy for guest travelers after June 30, 2019.
  • I reserved catering for an event using a no-cost agreement and the vendor submitted the invoice more than 60 days after the event ended. Will I be taxed for the cost of this event?
  • When a vendor or merchant does not issue a request for payment until after the trip or event end date, the 60 day count will begin on the invoice date. It is likely that the AggieTravel report will be identified as an exception to policy during the automated review process, however, please proactively notify Tax Reporting and Compliance by emailing afs-trcmail@ucdavis.edu.
  • My department requires all employees to submit travel documentation to our central office for preparation by a travel delegate. I gave my information to the delegate within the 60 days following my trip/event, but the delegate didn’t get the report prepared in time for me to originally submit the report within 60 days beyond my trip/event end date. Will I be taxed?
  • As the traveler, you are responsible to ensure your reports are originally submitted within 60 days beyond the trip/event end date. In a situation like this, you may apply for a one time exception to this tax policy, however, there is no guarantee that your request for an exception will be approved. In your request for exception please identify the timeline of your submission to the travel delegate and copy your delegate on the request for exception. At this time, leadership has agreed with providing a one-time exception for this situation. However, our goal is IRS compliance so after the initial implementation phase, we will only accept these exception requests in exceptional circumstances. 
  • How do I apply for an exception?
  • The path for an exception request varies between UC Davis Health and UC Davis Campus employees.   

     UC Davis Health employees should send an email request to Dianne Dakis at Ddakis@cdavis.edu.   
     UC Davis Campus employees should send an email request to afs-trcmail@ucdavis.edu.

     Include the AggieTravel report key, travel dates, timeline, explanation, name of delegate, contact info of delegate, and any other information that helps to explain the situation.
  • Why are CTS expenses included in imputed income when the university already paid for this cost?
  •  Utilization of the CTS  system does provides a convenient method to pay for university business. Policy and IRS regulations require that expenses be substantiated within 60 days. Substantiation is accomplished by reconciling the expense in AggieTravel.  If the CTS expense is not reconciled, it is not allocated to the correct expense account nor reviewed by the designated supervisor/AggieTravel report reviewer thus not meeting the reconciliation criteria.
  • I meant to clear a CTS expense but a year passed and now that expense is purged from the system and I am not able to clear the expense using AggieTravel. What should I do? 
  • CTS expenses are purged from AggieTravel after one year. Each of these transactions exceeds the 60 day IRS timeline and creates imputed income for the employee. Each  purged CTS transaction creates imputed income for the traveler. Due to the volume of purged CTS expenses, employees will not be notified ahead of time. 
  • How do I know if I have uncleared CTS expenses? 
  • CTS expenses that are less than one year old and are waiting to be reconciled on an AggieTravel report are listed on Decision Support Report FIS421.
  •  I misunderstood the timeline to submit my report. I thought this started for expenses after January 1, 2019.  Why are you taxing me for expenses incurred in 2018? 
  • Communications regarding the migration to an IRS compliant policy consistently stated that beginning January 1, 2019 reports submitted 60 days after the trip end date would create imputed income. If you have submitted a report in January that was for a trip that occurred longer than 60 days prior, it is consistent with prior communications that you are receiving imputed income. We understand that there are many items coming across colleagues’ desks and the nuance of the implementation date could get blurred. The traveler may request a one-time exception to the 60 day policy based on this situation. 
  • I did not know about the policy change; why wasn’t this change communicated?
  • April 20, 2017: It was announced that the campus would be enforcing the policy of recording imputed income when receipts are over one year late effective July 1, 2017.   

    July 1, 2017: There was concern that communication was not broad enough so the actual implementation of the 1-year timeline was extended to January 1, 2018. Multiple and simultaneous communications and system alerts were provided to persons submitting late travel reports sharing that had the campus policy been  implemented as planned, they would have received imputed income.

    January 1, 2018: We began imputing income for expense reports were completed one year after the end date.
  • What about entertainment?
  • We will evaluate application to entertainment expenses after June 30, 2019.
  • What if I'm on leave?
  • Being on leave during the 60 day time frame will not excuse the campus from the IRS regulations so we do strongly suggest that you work with your department to submit the report within the 60 day time frame. When circumstances of your leave preclude timely submission, please request an exception by emailing afs-trcmail@ucdavis.edu with the dates of your leave.
  • What if I can't find the receipts?
  • You should submit your report within the 60 day requirement and complete the declaration of lost receipt. This will ensure that you are compliant with UC and IRS regulations.
  • I found an expense for a trip that I forgot to include in my report. It’s now more than 60 days beyond my trip/event end date. Will the supplemental report for this expense be taxed?
  • Yes.
  • What if the taxes on the imputed income wipe out my paycheck?
  • Seek advice from your financial advisor. 
  • When will I see tax imputed?
  • Typically, imputed income is on the check one month after the report was submitted.
  • Are there any exceptions for grant funds?
  • There is not an exception for fund source of the payments. We are bringing ourselves into IRS compliance with the regulations surrounding the Accountable Plan which does not preclude any funding sources.
  • I was expecting imputed income from a late travel report on my paycheck. The amount looks correct, however it is recorded as Moving Expenses. Why is this? Will it impact my W2 and tax reporting? 
  • The pay code "MV2" is being used to record imputed income generated from late travel reports. Employer paid relocation costs (pre-2018 TCJA category of costs) and imputed income generated from travel reimbursements of a non-accountable plan are taxed and reported the same. Once the campus transitions to UC Path, a more general imputed income pay code will be used to record this income.  
  • I don’t know how to use AggieTravel. How can I submit my expense report in time?
  • AggieTravel is the campus designated vehicle to document travel expenses. If you are not familiar with the tool, you may wish to review the on-line resources at https://supplychain.ucdavis.edu/travel-entertainment/aggietravel and/or reach out to your department administrative support team.
  • What if the imputed income is applied to my check and later it is agreed to be incorrect?
  • The imputed income will be reversed on your next paycheck if it was determined to be imputed in error.
  • Why is a reimbursement being taxed? It is not earned income.
  • The University of California has an established Accountable Employee Reimbursement plan compliant with IRS Regulation 162-2.  This local policy change is bringing us into compliance with IRS Regulations and OP Policy (G-28 and BUS-79). While it is counter-intuitive that we would impute income when the employee hasn't been reimbursed from the campus. The reasons have to do with the UC's accountable plan for employee reimbursements under IRS Reg 1.62-2.  

    Travel reimbursements are considered nontaxable to employees because of the University’s accountable plan for employee reimbursements. One of the requirements for an accountable plan is for timely substantiation of expenses. When an employee reimbursement is not substantiated timely, the reimbursement migrates to being treated as a non-accountable plan reimbursement.  All reimbursements under non-accountable plans are treated as wages (imputed income). The explicit timeline in the UCOP policy and IRS code is 45 days.  However, there is a section under the safe-harbor IRS language that allows us to use the 60 day mark. 

    When reimbursements are managed under a non-accountable plan the IRS requires the employer to impute the income as wages and it is up to the employee to deduct expenses, as possible, on their individual tax return. The campus does have a set of reimbursements that are under a non-accountable plan and automatically treated as wages. The most common is uniform allowances.  The risk of non-compliance is that the IRS could void the University's accountable plan status and require all reimbursements to be treated as non-accountable.