Revenue Ruling 98-15

Revenue Ruling 98-15 provides guidance on how to determine if an employer's reimbursement of an employee's business expenses is taxable or non-taxable. Specifically, it clarifies that reimbursements under an accountable plan—where expenses are properly documented and returned unused amounts—are not considered taxable income. This ruling distinguishes such reimbursements from non-accountable plans, where there's less documentation or no requirement to return unused funds, which are taxed as income. This helps employers and employees understand their tax obligations regarding employee reimbursements for business-related expenses.