A. City:
1. The chief administrative officer shall determine positions in the city authorized for clothing allowances.
2. The department of management services will process payment of the amount specified as part of the payroll system, as directed by the chief administrative officer. An initial clothing allowance will be given to each individual upon hiring into a position where a clothing allowance is designated. This initial allowance is a one time payment to help defray the cost of initial uniform acquisition. This amount will be designated in the employee handbook.
3. The clothing allowance will be processed separately from the regular payroll on a quarterly basis.
4. The clothing allowance is considered as income to the employee as required by IRS rulings.
5. The gross amount of clothing allowances will be reported through the payroll system and social security tax will be calculated and deducted.
6. No income tax will be withheld from clothing allowance payments to the employee. Nonetheless, each employee may be required by IRS regulation to pay income tax on a clothing allowance. Each employee is advised to become familiar with pertinent IRS regulation and/or seek advice from an income tax preparation service.
7. The clothing allowance will be included as a part of gross income on the regular W-2 form.
B. Employee:
1. The employee must provide his/her own records of clothing expenses to comply with IRS reporting requirements. The city's position is that the clothing allowance is income and not a specific reimbursement of expenses. By providing payment separately, IRS requirements for deductibility of actual expenses can be met by the employees.
2. Justification of deductions is the employee's responsibility and the city assumes no responsibility for verification. (Eff. 3-14-2007)