While Cornell may pay for or reimburse an employee’s expenses incurred to travel to campus from a remote work location, the costs paid for or reimbursed may be taxable to the employee in certain instances.
The taxability of these expenses is not explicitly determined by an employee’s classification as a staff or faculty member, fully remote, hybrid, or on-campus. However, travel to campus for employees who are not fully remote (e.g., hybrid/on-site employees) is considered commuting and is not reimbursable. If paid, these amounts are taxable.
Determining Taxability
Taxability is determined by whether the campus in question is a regular or temporary work location for the employee (see below for definitions).
Note: Every employee must have at least one “regular” work location but can have more than one.
If the campus is a regular work location for the employee:
- All payments for travel (e.g., transportation, lodging, meals, etc.) are taxable to the employee, whether reimbursed by Cornell to the employee or paid directly by Cornell to the travel vendor.
If the campus is a temporary work location for the employee:
- Payments for transportation (e.g., car, train, air, taxi) to campus are nontaxable.
- Payments for lodging and meals are taxable unless all three of the following are met:
- Campus is at least 50 miles from the city or general vicinity of the employee’s “tax home” (see definition below).
- The trip to campus causes the employee to be away from their tax home for substantially longer than an ordinary day’s work.
- The employee cannot complete the round trip in less than 12 hours, including the required time on campus.
Travel expenses from one campus to another (or another Cornell University facility) are nontaxable. For instance, if an employee travels from California to the Ithaca campus for a meeting and subsequently travels to the New York City Tech Campus for a separate meeting and then returns home to California, the travel from California to Ithaca and from New York City to California may or may not be taxable based on the rules outlined above. However, assuming there is a Cornell business requirement for the meetings in both Ithaca and New York City, the transportation costs between Ithaca and New York City are nontaxable regardless of the taxability of the transportation to and from California and whether Ithaca and New York City are regular or temporary work locations for the employee..
Definitions
Regular Work Location
- Any physical work location where it is reasonably expected that recurring work will or actually does occur for more than one year (see temporary work location for a limited exception)
OR
- The primary physical work location for any appointment/position expected to last for one year or less.
Temporary Work Location
- Any physical work location where it is reasonably expected that recurring work will and actually does occur for one year or less unless the appointment/position is expected to last for one year or less.
- Any physical work location where it is reasonably expected that recurring work will or actually does occur for more than one year but where the employee does not work at that location for more than 35 days per calendar year.
Tax Home
An employee’s tax home is the general city or area around their regular work location, regardless of where they maintain a personal residence.
- If an employee has more than one regular work location, their tax home is their main place of business, which is generally where the employee spends the most time. If the same amount of time is spent at each location, look at the level of business activity conducted at each site and then at the amount of money earned at each location.
- If an employee doesn’t have a regular or a main place of business, the employee’s tax home is likely where they regularly live.
- If an employee doesn’t have a regular or main place of business or post of duty, and there is no place where they regularly live, the employee is considered an itinerant (a transient), and their tax home is wherever they work. All travel expenses are taxable for an itinerant.
