University of Missouri - Accounting Services

Meal Eligibility- BPPM 2:090

*Executive Summary - Effective October 1, 2008

Meal Eligibility PowerPoint

Why was the policy revised?

The University’s former policy relating to meal reimbursements during day travel was not in alignment with IRS requirements. The University recently modified the Meals section of BPM-505 Allowable Expenses and superseded the former policy that allowed reimbursement of meals on a non-taxable basis if the employee was in continuous travel status for 12 hours or more. While the IRS allows reimbursed meals when traveling overnight for a business purpose, generally meals during day travel are not reimbursable without causing tax implications for the employee.

What are the categories of meal reimbursements that are non-taxable to employees?

• Travel expense – travel requiring overnight stay for business purposes (no change in University policy)
• Business expense – business purpose must be adequately documented (no change in University policy)
• De minimis fringe benefit (hereafter referred to as “Overtime Meal”) – occasional meal while employee is traveling without an overnight stay (i.e., day trip) that extends the employee’s workday (policy change to BPM-505)

Who is affected?

Employees who make business trips without overnight stays and are reimbursed frequently and regularly for meals that do not meet the criteria for business expenses.

What hasn’t changed?

Travel expense – employee is required to stay away from home overnight for business purposes and business purpose of trip must be documented.

Business expense - if the meal is part of a meeting or other activity to discuss University business, it may be reimbursed if the business purpose of the meal and a list of the other individuals or group present are adequately documented.

What has changed for day trip meals?

Overtime meal—meal may be reimbursed to the employee on a non-taxable basis if day travel extends the employee’s work day beyond his/her normal work schedule as long as this is not a regular occurrence. The employee may be reimbursed for only the meal that became necessary as part of the employee´s extended workday (typically dinner). The approver is responsible for ensuring that such reimbursement is not a regular occurrence.

What are the options if day trip meal does not meet IRS requirements as business expense or occasional overtime meal as described above?

• A department may provide employee with a taxable meal allowance if the employee is required to make day trips for business purposes and is frequently and regularly reimbursed for a meal due to the extended workday (included in taxable income, similar to auto allowance), or
• Meals may be reimbursed to the employee at the discretion of the department and will be included in employee’s taxable income, or
• A department may choose not to reimburse.

What action should departments take in implementing this policy change?

If a department believes there are employees who do not meet the IRS requirements for non-taxable meal reimbursement under one of the three options above, the department should contact their respective Accounting Office for guidance.