Policy Change for our Tech Budget
Bringing ourselves into compliance with the IRS’s rule for not doing business reimbursements older than 60 days necessitates a change in our practice for administering our Tech Budget. For review, our current policy states:
Employees are allotted $500 per year for technology which is specific to a laptop and printer. Accessories are not included in this budget unless purchased alongside the computer in a given year (Ex: Laptop configuration with additional battery, etc). This amount does roll over each year if unused. Part-time employees receive a prorated amount based on hours worked. This can only be claimed at the end of each full year employed (ex: if you started in Sept. 2010 you can purchase a laptop but won’t be reimbursed until Sept. 2011).
Because some people have bought technology exceeding the amount they had accrued, we have allowed them to claim the rest of an accrued amount at their next employment anniversary. For, example, if you purchased a $1000 laptop after your first year of employment, you could claim $500 then, and one year later, you could claim the other $500. However this practice does not comply with the IRS’s rules for reimbursements. So in the future, our policy will be as follows.
Employees are allotted $500 per year for technology that increases productivity. This amount rolls over if unused. Part-time employees receive a prorated amount based on hours worked. The technology allowance can only be claimed at the end of one full year of employment. If employees purchase technology in excess of their accrued allowance, they will be reimbursed their accrued amount, within 60 days of the purchase. They can apply for the balance of the purchase after the full amount has been accrued, but all such retroactive requests will be taxable income.
Note that the new policy broadens the items allowed for the tech budget. The old policy was written in the days before tablets and mobile computing and this makes it more relevant for today. Also, note that after the first year, it is not only on the annual anniversary that the $500 accrues; the amount accrues monthly. Because retroactive requests are taxable (per IRS requirements) it means that if you can wait on your purchase until the full amount is accrued, you can get it tax free. If you can’t wait and buy earlier, you will have to pay taxes on any amount retroactively claimed. Please code all General Fund technology budget items to 152/8120 – Staff/Equipment. If you are not paid out of the general fund, please consult your supervisor as to how to code the expense.
The policy is written based on an accrual system because after the purchase, you own the technology purchased. It is not Epicentre’s – to maintain, replace if broken, or reclaim in the event you leave our employment.
Furthermore, if you are currently holding a receipt for technology that is older than 60 days, when you accrue the full amount of the purchase, you can turn in the receipt and also request an additional 7.65% to cover the taxes that you now have to pay because of our change in policy. This only applies to receipts dated before 7/14/16.