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What are Reimbursable Expenses?
What are reimbursable expenses? Those expenses are typically work-related or other eligible expenses (e.g., medical or dependent care).
Reimbursable expenses are different depending on the plan and company. For example, a healthcare plan may cover specific medical treatments and procedures but not others, or a dependent care FSA may cover child daycare expenses but will not include after-school care expenses. You should use any plan to study exactly what prices you could declare with a view to receiving your money back.
Are Expense Reimbursements Taxable?
The taxability of expense reimbursements will depend on the type of reimbursement and the nature of the expense.
Business expense reimbursements
The general rule is that if an employee receives a reimbursement for business expenses related to their job, the reimbursement is not taxable. This is because the expenditure was not personal, meaning that the reimbursement simply provided a payout to cover costs on behalf of an employee and did not represent income in addition to this. However, if the reimbursement is more than a true expense, it could be treated as income subject to tax.
Medical expense reimbursements
With the exception of an employee reimbursement for a medical expense paid as part of a qualified medical plan (as with an FSA or HSA), these reimbursements aren’t usually taxable. Since it is considered a qualified medical expense, the reimbursement allows only the employee to benefit further from it.
Can you reimburse yourself from HSA for the Prior Year’s Expenses?
Can you reimburse yourself from a health savings account (HSA) for the former year’s (your prior years’) eligible medical expenses and still be tax-free if the medical charges have to come afterward, when your HSA was created? If the expense is incurred after the HSA was established, you can reimburse yourself for an eligible medical cost at any time, as long as it meets those criteria (has not already been reimbursed).
Also, See: Moving Expense Reimbursement
