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Travel Expense Reimbursement to Special Speakers

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Question:

Is payment of airfare, hotel expenses, etc. considered taxable income to special speakers? How should these amounts be reported?

Answer:

Compensation to non-employees is reportable on Form 1099-MISC in box 7. According to the Instructions for Form 1099-MISC, the amounts mentioned in the question above are examples of payments which may be reportable in box 7 of Form 1099-MISC:

Reportable as taxable income:

"A fee paid to a nonemployee, including an independent contractor, or travel reimbursement for which the nonemployee did not account to the payer, if the fee and reimbursement total at least $600 [is reportable in box 7]. To help you determine whether someone is an independent contractor or an employee, see Pub. 15-A." IRS Publication 463 affirms this interpretation.

NOT reportable as taxable income:

However, if the special speaker does account for his expenses in accordance with the documentation requirements of Publication 463, then the reimbursements may be excluded from Form 1099-MISC reporting. Typically, this involves substantiating the cost, time, place and business purpose of the expenditures. Table 5-1 in the Publication is particularly helpful.
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