Legal & finance tips for divisions: When is travel an award and not a reimbursement?

APA's Office of General Counsel and Office of Financial Services answer questions and provide tips for division leaders.

When providing travel money to a participant for a convention or meeting, it can be confusing to know when the payment is an award that is taxable to the recipient and when it is just a reimbursement of expense (i.e, not taxable to the recipient). The difference is important — for an award, an IRS Form W-9 must be completed by the recipient before the payment can be issued. The recipient then receives an IRS Form 1099 at the end of the year.

So, how do you know the difference? If the participant provides receipts that sufficiently supports the expense (i.e., receipt showing payment for airline tickets and boarding pass to prove they traveled, hotel receipt showing payment in full, dining receipts showing payment, etc.), then the payment is a reimbursement of expense and is not taxable to the recipient. This is the case even if the allowed travel expenses were capped at a particular dollar amount, such as $250. If, however, they were allowed a certain dollar amount for travel expense but were not required to provide support for the travel, then the payment is considered an award and is taxable to the recipient. A completed Form W-9 must be received from the recipient before payment can be made.

If you have any other questions with regard to travel expenses or if you need a blank Form W-9, feel free to contact us.

APA's Central Office can provide division leaders with finance or legal support. For additional questions, contact:

  • Finance questions: Jennifer Aldridge or Holly Flynn
  • Legal/contract questions: Jesse Raben