State of Connecticut Comptroller's  Memorandum No. 91-48a


December 9, 1991


Attention: Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers
Subject: Change in Method of Payment for Reportable Employee Allowances/Payments

Memorandum No. 91-48, dated November 1,1991, advised agencies of the change in method of payment for reportable employee allowances/payments from ACCOUNTS PAYABLE to PAYROLL SERVICES. Memorandum No. 91-48a, effective December 27, 1991, details the payment and payroll procedures for employee allowances.

All of the allowances/payments discussed in this memorandum are considered wages with the exception of moving expenses. As required by Code Section 162 of the Internal Revenue Code, Federal Employment Taxes, State and Federal Income taxes must be withheld. Additionally, with the exception of moving expenses, all allowances/payments processed on the payroll are recognized as salary for retirement purposes for all retirement systems except for the Teachers' Retirement System (TRS). Accordingly, they are subject to retirement contributions appropriate for the individuals' retirement system and plan membership.

As with all wages paid from Federal and Private grants and funds other than the General Fund, these payments will be subject to fringe benefit cost reimbursement.

Since subject payments will be processed on payroll, charges will reduce the unencumbered balance of the appropriation. Therefore, no commitments should be made.  


Reportable employee allowance/payments, as listed below, must be paid through PAYROLL SERVICES for the pay period beginning December 13, 1991 (check date January 10, 1992). Please note: The check date was incorrect in Memorandum No. 91-48. It is the responsibility of each State agency to develop internal procedures between the Business Office and the Payroll Office to transmit the applicable information in a timely manner.

A. Business Expenses  
1. Forms - CO-1004 (Time card Entry Form):  
Safety Shoe
R1; Amount; D/OE Code 1E
Clothing and Cleaning
R1; Amount; D/OE Code 1F
Home Office
R1; Amount; D/OE Code 1G
R1; Amount; D/OE Code 1H
Kennel Allowance
R1; Amount; D/OE Code 1J
Resident Troopers
R1; Amount; D/OE Code 1K
Daily Auto Usage Fee
R1; Amount; D/OE Code 1L
Travel Expense:
Premium City Supplement
Lump sum Undocumented
Excess Per Diem *
R1; Amount; D/OE Code 1M
* Refer to Section I-C below.
  2. On-Line - Screen 381 or 382: Same as above.
  3. Remote Job Entry - ZT Transaction: Same as above.
B. Taxable/Reportable Fringe Benefits and Other Employee Payments
1. Forms - CO-1004 (Time Card Entry Form)
Grant Payments * R1; Amount; D/OE Code 1N
Moving Expenses* R3; Amount; D/OE Code 1P
Attendance Awards * R1; Amount; D/OE Code 1R
Child Care * R1; Amount; D/OE Code 1S
Reportable Tuition* R1; Amount; D/OE Code 1T
* Refer to Section I-C below.
2. On-Line - Screen 381 or 382: Same as above.
3. Remote Job Entry - ZT Transaction: Same as above.
C. Explanation of Allowance or Payment
1. Per Diem Allowance
A per diem allowance is a payment made to an employee in lieu of reimbursing actual travel expenses for lodging, meals, and incidental expenses; i.e., expenses while traveling for laundry, dry cleaning and tips for services but excluding taxi cab fares and the cost of telephone calls.
Currently, the federal per diem rate for meals and incidental expenses for a high-cost locality is $34 and $26 for all other localities. Any collective bargaining meals per diem and incidental allowance exceeding $26 ($34) is reportable. See Appendix A for high-cost localities.
For each six hour period or portion thereof that the employee is traveling, one-fourth of the federal rate is allowed for determining reportability.
Any per diem amount paid, either provided by collective bargaining agreement or by standard State travel regulation, in excess of the federal per diem rate is reportable.
Employees are afforded, by State Travel Regulations and/or collective bargaining agreement, the following types of allowances that should be used in comparing the State per diem rate to the federal per diem meal rate. (Lodging is paid as a reimbursement and is, therefore, not considered reportable wages.):
1. Meal Rate
2. 15% Gratuities
3. Tax on Meals
4. Undocumented Lump Sum
5. Premium City Supplement
6. Other Miscellaneous Meal and Lodging Charges
See example on the following page.
EXAMPLE: Assume a member of the P-5 bargaining unit travels for three (3) days. In example (1) she traveled to a high-cost area; in example (2) she traveled to an area not considered high-cost. In example (3) the employee attended a one-day conference and traveled from 8:00 a.m. to 6:00 p.m. out of state and was entitled to a lunch allowance in a location that is not high-cost.


Daily Rate (3) Entitlement to
(1) High-Cost (2) All Lunch Allowance
Area Others Only
1. Meal Rate $ 30.00 $ 30.00 $ 8.00
2. 15% Gratuities 4.50 4.50 1.20
3. Taxes on Meals (5.5% rate) 1.65 1.65   .44
4. Undocumented Lump Sum 5.00 5.00 ---(after 2 days)
5. Premium City Supplement 6.00 --- ---
6. Hotel Gratuities (3 or more 1.00 1.00 ---
consecutive nights) ______ _____ ______
7. State Per Diem Rate $ 48.15 $ 42.15 $ 9.64
Federal Per Diem Rate $ 34.00* $ 26.00* $13.00* (1/2 of $26.00)
Amount to be paid on payroll $ 14.15/day $ 16.15/day $ -0-
Days of Travel x 3 x 3 --------
Total Amount to be paid
through payroll $ 42.45 $ 48.45 $ - 0 -

* Amount to be paid through Accounts Payable . In addition, reimbursement for taxis, other ground transportation, parking charges, tolls, and telephone/telegraph charges should also be paid through Accounts Payable.

2. Grant Payments to Employees
Grant payments made to employees based on a collective bargaining contract (for instance, University faculty) are reportable.
3. Moving Expenses
Moving expenses are not considered wages but must be reported to the Internal Revenue Service. The payment is not subject to withholding, taxes or retirement contributions. However, all moving expenses must be processed through the PAYROLL SERVICES DIVISION. A separate payroll check will be issued.
Federal Form 4782, Employee Moving Expense Information, must be completed in duplicate. A copy must be given to the employee by the end of the calendar year and the other copy is for the agency file. Payments must be made exclusively to the employee. Third party payments are no longer acceptable.
Since moving expenses are reportable but not considered wages, the expenditure object code will be 05-360 and should not be coded to personal services appropriations (001 SID).
These payments are to be charged to other expenses (002) or other appropriations which will accept non-salary charges.
4. Attendance Awards
Attendance awards of $25 or less (cash or gift certificate) are not reportable; however, an employee who receives more than $25 (cash or gift certificate) in a calendar year is reportable. The agency must maintain control over the awards given to comply with Federal regulations.
5. Child Care Expenses
Child Care Expenses, except those made through the Dependent Care Program, paid by an agency for their employees are reportable.
6. Reportable Tuition
Reportable tuition are payments for employees who are enrolled in courses that are not required for their job or are not otherwise job related.
Tuition-reimbursements that are non-reportable are to be processed in the usual manner, through ACCOUNTS PAYABLE.
D. Travel Authorizations
All CO-112 Travel Authorizations, will be completed as usual, including any reportable and non-reportable amounts.
E. 9916 - Tuition, Training & Travel
1. For payments that are not reportable the current procedure, submitting the documents to the Comptroller's Business Office, is still in effect. In addition, the employee number and payroll unit level 2 code must appear in the remarks section of the CO-17XP, Employee Voucher.
2. When filing a claim for reimbursement with a portion that is reportable, the following must be completed:
- Two CO-17XP, Employee Vouchers must be completed. An original CO-17XP for the items that are non-reportable and one CO-17XP for the items that are reportable. Photocopies of an original CO-17XP are unacceptable.
- On the CO-17XP with the reportable amount the employee number, the
payroll unit level 2 code and D/OE Code must appear in the remarks section.
- Submit both CO-17XP forms, duplicate copies and two copies of the supporting documentation with CO-19, Expenditure Batch Header, to the Comptroller's Business Office for approval and payment. The CO-19 should only reflect the dollar amount of the items that are non-reportable. The reportable amount will be processed through the payroll system and appear in the employee's paycheck.
3. For payments that are fully reportable, such as reportable tuition, the following form must be completed:
- CO-17XP, Employee Voucher, with two copies of all documentation attached showing the reportable amounts in the reportable section of the CO-17XP. The employee number, payroll unit level 2 code, and D/OE Code must appear in the remarks section of the form.
Submit the CO-17XP to the Comptroller's Business Office for approval and payment.
F. Employee Suggestion Awards

Employee Suggestion Awards are reportable as wages. The Department of Administrative Services will be issuing new instructions on the processing of these awards. The new procedures will be issued by January 1, 1992. If your agency has not received the instructions by that time, please contact the State Suggestion Program at 566-5669.


New Character and Major Object Codes have been set up to accommodate this change. Please be sure to use the correct coding when processing documents for payment.
A. Current Expenses - Personal Services - 01 . For use on Payroll only.
01 230 Allowance and reportable payments to employees - State Retirement System:
Allowances and reportable payments to employees based on collective bargaining agreements for members of the State Retirement System.
01 240 Allowances and reportable payments to employees - Alternate Retirement Plan with NO Social Security:
Allowances and reportable payments to employees based on collective bargaining agreements for members of the Alternate Retirement Plan with no Social Security coverage.
01 250 Allowances and reportable payments to employees - Alternate Retirement Plan with Social Security:
Allowances and reportable payments to employees based on collective bargaining agreements for members of the Alternate Retirement Plan with Social Security coverage.
01 260 Allowances and reportable payments to employees - Teachers Retirement with NO Social Security:
Allowances and reportable payments to employees based on collective bargaining agreements for members of the Teachers Retirement System with no Social Security coverage.
01 270 Allowances and reportable payments to employees - Teachers Retirement with Social Security:
Allowances and reportable payments to employees based on collective bargaining agreements for members of the Teachers Retirement system with Social Security coverage.
B. Current Expenses - Sundry Charges - 05
05 360 Employee Moving Expense:
Payments made to employees for moving expenses. Payments are to be made on payroll only. Third party payments are unacceptable. Should not be charged to Personal Services - 001.
Example: Processing a shoe allowance for an employee in the State Retirement System would be: D/OE code 1E, Character Object Coding 01 230.


Processing of Non-Reportable Employee Reimbursements
All non-reportable employee reimbursements will continue to be processed in the usual manner. Reimbursements for registration fees, lodging, transportation, mileage* (under the rate per mile as directed by the Internal Revenue Service) etc., will continue to be processed using the CO-17XP - Employee Voucher.
* Transportation mileage at or below the current Internal Revenue Service (IRS) standard mileage rate, meals and incidental expenses at or below the current per diem rate may also be processed on the CO-17XP voucher. However, amounts in excess of the IRS rate must be split. Excess amounts are reportable and are to be processed through Payroll Services. A CO-17XP Addendum must be attached to the CO-17XP to support the splitting of the per diem meal allowance (See Section I.C.). The attached Addendum form should be copied for this purpose.
This change in procedure directly impacts the CO-17XP form when completing it for reimbursement; block number 12 - Reportable Type will always be indicated as "N" - No reportable amount, and block number 15 - Reportable Amount will always be blank.
Expenditure documents received at ACCOUNTS PAYABLE after December 1, 1991, completed incorrectly, will be disallowed and returned to the agency without exception.


Safety Shoe NP-2 20.3
NP-5 20.7(a)
P-1 9.10
P-4 35
P-5 24.9
JN-7 36.15
Clothing and Cleaning NP-1 19.8
NP-5 20.7 (b)
Home Office NP-5 20.8
P-2 47.6(c)
P-5 24.13
Uniform P-1/NP-6 9.13
Monthly Stipends
Kennel Allowance
NP-1 19.11(a)
Resident Troopers
NP-1 19.11(b)
Daily Auto Usage Fee P-2 39.2
P-3A 27.5
P-3B 28(c)
P-4 21.1
P-5 25.5(b)
Premium City Supplement P-5 25.10(b)
Lump Sum Undocumented Out of State P-5 25.10(a)
Community Colleges 21.6 (c)
Technical Colleges
Technical Colleges
The above listing is intended as a guide for State agencies to follow in identifying payments that should be made through payroll as reportable wages. This listing may not be all-inclusive.


This memorandum supersedes the Expenditure Batch List Section and the Federal Income Tax Reporting, Form 1099 and W-2 Section of the State Accounting Manual. Both sections will be updated in the next revision of the State Accounting Manual.


Questions may be directed to the Office of the State Comptroller as follows:
Payroll Procedures:
Forms and On-line: Payroll Services Division, 702-3463
Remote Job Entry: Information Technology Division, 702-3600
Accounts Payable Procedures:
Central Accounts Payable Division, 702-3399
Character and Major Object Coding:
Accounting Services Division, 702-3374
Memorandum Interpretation:
Policy Services Division, 702-3440




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