But, if the reimbursement follows an accountable plan and the payment is a reimbursement that is not taxable to the employee under current tax law, you may reimburse the employee and there would not be any reporting on either a form W2 or form 1099.

Whether you need to issue a 1099 for travel reimbursement depends on whether the payment was made under an "Accountable Plan." In 2026, if a contractor provides high-fidelity receipts and the reimbursement exactly matches the business expense, it is generally not taxable income and does not need to be reported on a 1099-NEC. However, if you provide a flat "High-Fidelity" travel allowance or per diem without requiring receipts, or if the reimbursement exceeds the actual cost, the excess is considered taxable compensation. For 2026 businesses, it is a high-fidelity requirement to report these non-accountable payments if the total (including fees) exceeds $600 in a calendar year. It is a high-value necessity to consult with a high-fidelity tax professional to ensure your high-fidelity bookkeeping distinguishes between "Pass-Through" expenses and "Income," as the IRS in 2026 has increased scrutiny on "High-Fidelity" corporate travel deductions and contractor classifications.