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Reimbursement

What is meant by a "reimbursement" with regard to flight crew taxes?

Reimbursement means that a taxpayer's employer covered an expense that was originally paid for by the taxpayer.  Reimbursed expenses are not tax deductible.  If a pilot or flight attendant's employer reimburses the crew member for a given expense, that expense cannot be written off.

How is per diem treated with regard to a reimbursement?

Typically, per diem is a form of reimbursement, but only when it is provided via an accountable plan.  An employer that pays per diem via an accountable plan is reimbursing the crewmember for their meals and incidental expenses while on work-related travel.

If a pilot or flight attendant is reimbursed for meals via per diem, how can he or she benefit from the per diem deduction?

The reason the so-called per diem deduction generates an increased tax refund for flight crewmembers is because the per diem from an employer almost never exceeds the crewmember's M&IE expenses when using the city-by-city CONUS and OCONUS per diem rates that can be used in lieu of actual meals costs incurred by a flight crewmember.  In other words, because the reimbursement (per diem from the employer) is less than the expense (M&IE per diem deduction), a tax write off for meals and incidental expenses is allowed.


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