Sample Policies For Reimbursements (Page 2 of 3) in pdf

Sample Policies For Reimbursements Page 2

Accountable Expense Reimbursement Policy

Sample of wording which needs to be placed in the church board minutes by December 31. It only needs to

be approved once, not annually.

Whereas, Income tax regulations provide that an arrangement between an employee and employer must

meet the requirements of business connection, substantiation, and return of excess payments in order to be

considered reimbursement;

Whereas, Plans that meet the three requirements listed above are considered to be accountable plans, and

the reimbursed expenses are generally deductible from gross income to arrive at adjusted gross income;

Whereas, Plans that do not meet all the requirements listed above are considered nonaccountable plans, and

expenses are subject to the two-percent floor imposed on certain itemized deductions; and

Whereas, First Community Church wants to establish an accountable expense reimbursement policy in

compliance with the income tax regulations;

Resolved,

That First Community Church establish an expense reimbursement policy whereby ministers and other staff

serving the church may receive advances for or reimbursement of expenses to the extent provided in the

current adopted budget if:

a. The expense has a stated business purpose related to the ministry of the church.

b. The minister/employee provides substantiation to the church for all expenses.

c. The minister/employee returns all excess reimbursements within a reasonable time.

Resolved,

That the following methods will meet the "reasonable time" definition:

a. An advance is made within 30 days of when an expense is paid or incurred.

b. An expense is substantiated to the church within 60 days after the expense is paid or incurred.

c. An excess amount is returned to the church within 120 days after the expense if incurred.

Resolved,

That substantiation of business expenses will include: business purpose, business relationship ( including

names of persons present), cost (itemized accounting), time, and place. Auto mileage reimbursed must be

Sample Policies For Reimbursements Page 2