Reimbursement Of Travel Expenses
All international visitors can receive travel reimbursements. However, whether those payments are business expenses or taxable income depends on the visa category of the visitor and the services performed. There may also be restrictions on what activities an international visitor may engage in while in the USA. If a travel expense is not taxable, Windstar completion is not required.
Non-Taxable Travel Expenses
- Invited speaker or consultant hired by Vanderbilt University
If an international person has been invited to speak, present a paper, or otherwise actively conduct an educational or academic activity (in whole or in part), travel reimbursement expenses are not considered to be taxable income. Instead, they are categorized as business expenses since the international visitor was invited on campus by Vanderbilt University
Attach a copy of the letter of invitation (or copy of brochure showing individual on the program itinerary/agenda) to the check request (CR) or consultant form along with all documents required by Disbursements.
- Moving expenses for employees who meet IRS "time and distance" and "qualified travel expense" definitions
Attach receipts and document that payment is for relocation expense
- Job-related interview expenses (this does not include students visiting campus for enrollment purposes or recruitment of graduate students)
Attach documents that demonstrate the purpose of the expense.
Taxable Travel Expenses
- Non-employee or contractor
- Conference or seminar attendees who are not speakers or presenters
- Students traveling to seminars outside of Vanderbilt University
- Short-term trainees
- Prospective students
- Employee non-business related travel
- Living expenses for short-term employees
- Moving expenses that do not meet IRS requirements
Expense reimbursements are taxable if there is no quantifiable service provided to Vanderbilt by the individual. Another way of stating this is that, if there is no compensatory relationship or business relationship the reimbursement is taxable. In these situations, the payee is neither an employee nor independent contractor. Whether or not any other wage or honorarium is provided is not relevant to the tax withholding assessment.
Reimbursements to Third-Parties
It is also possible for speakers to be a representative of a business and it is the business that must receive the travel reimbursement. In these situations, the reimbursement is handled differently and the department should contact a VISIT international tax advisor for assistance. Additional information can be found on our "Payments to Businesses" webpage.
Reimbursements or direct payment to third-party vendors are potentially taxable income to the actual beneficiary recipient. These payments are generally designated "Travel Award" or "Travel Grant" or "Financial Aid" and may be full or partial reimbursement of expenses to attend an educational event. Reimbursed travel expenses to international attendees of educational events are considered to be non-service scholarships or fellowships and are fully taxable.
Additional Points to Remember
- If the person is a non-resident alien for tax purposes, tax must be withheld at the time of payment unless treaty benefits are available.
- Gross up of the payment is required if payment is to a third party and tax cannot be withheld from the payment to the third party vendor. An example of this is paying a hotel directly for an international visitor’s room expenses.
- Travel and/or living expenses paid for short-term employees are forms of taxable income.
- Portions of relocation expenses for long-term employees may not be covered under ‘qualified’ moving expenses. Contact a VISIT international tax advisor for assistance is determining whether such payments are taxable.