41 C.F.R. § 302-17.60
Definition of the terms “Year 1” and “Year 2” used in the two-year RITA process
(a) Year 1 is the calendar year in which the agency reimburses the employee for a specific expense, provides an allowance, or pays a vendor directly. If an employee's reimbursements, allowances, and/or direct payments to vendors occur in more than one calendar year, the employee will have more than one Year 1.
(b) Year 2 is the calendar year in which the employee submits their RITA claim and the agency pays the RITA.
(c) In most cases:
(1) For every Year 1 an employee will have a corresponding Year 2;
(2) Every Year 2 immediately follows a Year 1; and
(3) Year 2 is the year in which the employee files a tax return reflecting the remaining tax liability for taxable reimbursement(s), allowance(s), and/or direct payments to vendors in each Year 1.