The Foundation may reimburse key employees at UGA for payments made for social club dues and/or memberships in the employee’s name. The club dues and/or memberships must be approved in advance by the Foundation and UGA before any reimbursements to the employee are permitted. The reimbursement will be reported to UGA Payroll Department annually and may be included in the employee’s W-2 as taxable income subject to IRS reporting requirements IRC §274(a)(3).
The Foundation no longer allows direct payment to the vendor for social club dues and/or membership. The employee should pay for the membership dues and then seek reimbursement from the Foundation. The key employee must complete a Club Membership Business Use Substantiation form for each club membership reimbursement. This form can be found on the Foundation’s website under Administrative Forms / Expenditure Control Forms. Per the IRS reporting requirements, each membership reimbursement should reflect the percentage of personal and business use. Therefore, with each reimbursement request, the employee must attach the completed Club Membership Business Use Substantiation form.
If the employee can substantiate the expense as solely business use, then it is considered a non-taxable working condition fringe and will not be included as taxable income by UGA payroll. Initiation fees associated with the club membership and for which the employee requests reimbursement, qualify for consideration under the taxable fringe policy. The type of membership will determine whether these fees are personal and taxable or nontaxable as a working condition fringe. The Foundation will submit an annual report for each employee to UGA Payroll for each social club membership and copy the report to the employee. UGA Payroll will make the final determination on taxable and non-taxable reporting for each employee.
Procedure for Reimbursement/Reporting:
- The employee must obtain prior approval for each membership from the Foundation and UGA.
- The employee should pay the monthly fee, any associated initiation fees, and any associated entertainment costs directly to the vendor by the due date each month The Foundation will not pay for any late fees associated with club memberships.
- The employee should complete the Club Membership Business Use Substantiation form to attach to each reimbursement request which will indicate the business activity for that time period.
- A Foundation check request with attached copy of club membership invoice, Club Membership Business Use Substantiation form, and any business entertainment receipts with associated Entertainment Reimbursement forms should be submitted to the Foundation’s Expenditure Control Department for processing.
- The Foundation will reimburse the employee for the amount of the Foundation check request.
- The Foundation’s Accounting Office will submit an annual report each November to UGA Payroll for each employee by membership and include a copy of each Club Membership Business Use Substantiation form for the period of November 1 to October 31. UGA Payroll will make the final determination concerning taxable and non-taxable inclusion in the employee’s W-2 form.