Tax & Compliance
Reimbursement or allowance that fails the accountable-plan tests and is taxed as wages.
A non-accountable plan is any expense payment that fails the IRS three-test framework (e.g., a flat US$600/month vehicle allowance with no per-trip substantiation). The full amount lands in the W-2 as wages subject to withholding, FICA, and Medicare. The employee can try to deduct actual expenses, but the TCJA suspends unreimbursed employee deductions for most filers through 2025.