Independent Contractor Travel

Independent Contractor Travel

Independent Contractor Travel

This section applies to individual "independent contractors" (see the Personal Services website for a thorough discussion of independent contractor services) who wish to file for reimbursement of their travel expenses through UAB's accountable plan for independent contractors.

All other independent contractors (e.g. consulting companies, other universities, computer programming companies, etc., or individuals who do not wish to file their travel expenses under UAB's accountable plan) should pay their own travel expenses and include them along with their other applicable business expenses in their invoiced fee.

The independent contractor accountable travel plan only applies to specified meals, lodging, and transportation travel costs directly attributable to business travel for UAB. All other costs and business expenses are excluded from the independent contractor accountable travel plan and should all be included in the contractor's taxable fee if they are applicable.

NOTE: The independent contractor must pay for these travel expenses personally and then apply for reimbursement after the trip.

There will be no payments to third parties (hotels, travel agencies including UAB Travel Center, rental car agencies, airlines, other individuals, etc.) on behalf of the independent contractor under any circumstances.

Under the individual independent contractor accountable travel plan, reimbursement requests must be filed timely. The IRS defines timely as within 60 days of the date that the expenses were incurred. Independent contractor travel reimbursement requests beyond this 60 day period will be denied unless: (1) the documentation includes special approval by the applicable Dean (if it is going to paid by a School), Hospital Finance (if it is going to be paid by the Hospital), or the applicable Executive (if not being paid by either a School or the Hospital) authorizing special payment even though the 60 days deadline has passed, and (2) payment will be made as taxable income to the individual (i.e., it will be deemed part of the fee instead of part of the independent contractor accountable travel plan).

In order to apply for reimbursement under the accountable plan, the independent contractor will have to complete an official UAB Individual Independent Contractor Travel Expense Report form which will become an attachment to the Oracle Payment Request. The department will need to generate and print the form within Oracle and have the Independent Contractor sign it. This form includes a certification to be made by the individual contractor and must be signed personally by the contractor. Because it details the expenditures and includes the contractor's signature, this form may substitute for an invoice in regard to these travel expenses. A printable copy of the blank form is available as an Exhibit on the Personal Services website.

The following applies to the accountable travel plan for independent contractors. Items not addressed below follow the same guideline as Employee Travel.

Mileage
Under the accountable plan, the independent contractor will follow the federal mileage allowance (see the IRS website for the applicable rate). Because they are not employees, they are not required to follow the State of Alabama's mileage allowance.

Expenses
The plan includes actual expenses, not per diems. If UAB is invoiced for travel based upon a per diem rate or some other flat rate, then it is required to be made part of the contractor'sfee because they have not made a full accounting to UAB.

Transportation
First class airfare/transportation is generally unallowable under the independent contractor's accountable plan, unless documentation is attached justifying that it was necessary for medical reasons or because reasonable alternatives were clearly not available.

Adventure Travel
If independent contractor tickets are ordered through the UAB Travel Center, they must be paid for with the independent contractor'scredit card or the independent contractor's personal check.

Lodging
UAB will not make any direct payments to hotels for an independent contractor's stay, not even for deposits to hold the room. Independent contractors are limited to the single occupancy room rate for hotel costs, even if they happen to be traveling with a spouse/companion. (However, if the other party staying in the room was also engaged by UAB as an independent contractor and this travel was directly applicable to the UAB contract, then the double occupancy rate would be acceptable.) Reimbursement for hotel room movies is not allowed under this plan.

Laundry Services
Reimbursement for laundry services is not allowed. Such services are considered to be personal costs, not business costs.

Tips
Tips must be kept reasonable.

Meals
Independent contractors may be reimbursed for breakfast, lunch, and dinner, but not between-meal snacks. If there is no overnight stay involved for the independent contractor's trip, the meal reimbursements must beincluded in the 1099-reportable fee, per IRS regulations.

Alcohol
Independent contractors can not be reimbursed for alcoholic beverages or alcohol-related costs under any circumstances. Contractors will need to personally certify on the travel form that such costs are not included in their reimbursement requests.

Phone Calls / Internet Use
Telephone calls home are considered to be personal expenses and therefore cannot be reimbursed by UAB. Business phone calls and use of internet in support of UAB business may be included in the independent contractor's travel request.

Documentation
Original receipts will be required for all expense reimbursement items (other than baggage-handling tips) made under the independent contractor accountable plan. This is stricter that the current employee accountable travel reimbursement plan. However, this is considered necessary to permit UAB to defend these costs upon audit, because we do not have the same level of control over contractors that we have over employees.

Independent contractor travel reimbursement requests approved by the accountant as qualifying under this accountable plan must use special object codes designated for this purpose, so that those amounts can be properly distinguished from the 1099-reportable amounts.