February 15 deadline for submitting late out-of-pocket expenses and new exception form

Feb 2, 2024 | News

All out-of-pocket expenses incurred between September 1 through December 31, 2023, must be submitted by February 15, 2024, for tax-free reimbursement.

In a communication in December, we advised the U-M community that the university’s heightened adherence to its current 45-day reimbursement policy for out-of-pocket expenses is due to the IRS’ increased enforcement of its policy regarding the timing of the reimbursement of these expenses.

Two ways to submit tax-free expenses by February 15

    1. Units processing their own expense reports must submit them on a Concur expense report to their Concur unit approver by February 15. A variety of resources to help units create and submit a Concur expense report can be found on the Procurement Services website.
    2. Units using the SSC’s Report Creation Team must submit the expenses to the SSC by February 15. The preferred method to submit is via the Expense Report eform.

Submitting expenses for taxable reimbursement through Payroll

After February 15, 2024, out-of-pocket expenses submitted after 45 days from the transaction date—or end of the trip for travel expenses—will be taxed and must be paid through Payroll. If the unit chooses to reimburse the late expense, its HR Administrator can submit a Personnel Action Request (PAR) for Additional Pay using the TEA Taxable Expense Reimbursement earnings code.

New exception request form for tax-free reimbursement

Out-of-pocket expenses incurred on, or after, January 1, 2024 must be submitted for reimbursement within 45 days of the transaction date—or end of the trip for travel expenses. Exceptions to this requirement may be granted by the Tax Department in extenuating circumstances. Information about applying for a late submission exception—as well as the necessary form—can be found on the Tax Department’s website.

If you have any questions about the taxation of late expenses, please email [email protected]. For general procurement and travel policy questions, please email [email protected] or call 734-615-2000 (option 3, then option 1).

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