Test Your AP IQ: Reimbursements to Spouses

June 13, 2008

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• We have very few spouse's that travel with our employees on company business. But---Should employee's company travel expenses be reported on their W-2? Thanks

  BDewan on June 13

• If the spouse's presence qualifies as a bona fide business expense and is necessary or helpful to the business, the cost doesn't have to be treated as taxable income to the employee. For instance, if the spouse is just tagging along and the employee is attending a seminar, the spousal travel cost, if reimbursed by the company, would be considered taxable income. If, however, the spouse attends business dinners to entertain clients / customers or motivate employees, this would qualify as a bona fide business expense. Exercise caution when classifying reimbursed spousal expenses. We allow spouses to travel with our employees but only reimburse when the President's spouse attends one annual customer event where spouses are expected to attend.

  RSPIVEY on June 16