Gifts to Faculty, Staff and Students
This policy clarifies the taxable status of prizes, awards and gifts to University faculty, staff and students and specifies whether University funds may be used to purchase prizes, awards and gifts.
Policy & Guidelines
The Internal Revenue Service Code states that under certain circumstances the value of prizes, awards and gifts to individuals is considered taxable income. The University follows IRS regulations with regards to the giving of business gifts, awards and prizes.
Gift Cards & Gift Certificates
Gift cards and gift certificates, regardless of the value, are considered by the Internal Revenue Service as a cash equivalent and are subject to tax reporting and tax withholding. Therefore, they are not allowed to be purchased with University funds.
The University considers the following to be personal gifts that will not be paid or reimbursed with University funds other than at the President's discretion.
- Birthday gifts (including cakes)
- Holiday gifts
- Wedding gifts
- Baby gifts
- Sympathy gifts
- Going away gifts
Awards to Employees
Awards provided to employees in the form of cash, gift certificates, or noncash merchandise for performance, productivity, or other reasons connected with their employment are considered taxable compensation. These awards must be reported as employee compensation on the employee's Form W-2 and is subject to federal withholding and FICA taxes.
Occasionally, the University may offer door prizes and other noncash gifts to entice employee or student participation in an event. These noncash gifts must be de minimis in amount (under $25) in order to be allowable. The prizes may NOT be gift cards