Non-accountable Plan

A non-accountable plan is a way some companies reimburse employees for business-related expenses, like travel or supplies, where there’s no strict requirement for employees to submit receipts or account for the costs. Because of this, the IRS considers these reimbursements as income, meaning they are taxed and included in the employee’s wages. In contrast, an accountable plan requires employees to report expenses and provide receipts, allowing reimbursements to be tax-free. Essentially, non-accountable plans are less formal and come with tax implications for the employee.