I am paid via as a W-2 hourly wage employee. I submit a expense report bi-monthly for gas reimbursements. Upon receiving my 1st paycheck, I was paid the correct hourly and gas amounts, but was taxed on both the hourly and my reimbursement for gas. Should the reimbursements be subject to federal and state taxes?

ANSWER

The BIDaWIZ Team's Answer:

If your company is reimbursing you for the exact amount of out of pocket expenses and you don't exceed the federally allowed deductible mileage deductions for instance, then this is likely an accountable plan. Under accountable plans, employee reimbursements should not be reported as taxable wages. If the plan was non accountable, then that would be taxable. Did you ask your employer what type of plan the company is under?