Policy 505: Employee Gifts and Awards

Section: Operating Policies
Sub-Section: General
Policy Number: 505
Subject: Employee Gifts and Awards
Origin Date: August 15, 2006
Revision Date(s): August 15, 2006, July 11, 2018
Effective Date: July 11, 2018
Download the PDF File for Policy 505

OVERVIEW

The University understands the importance of maintaining morale by recognizing employee length of service, retirement, or other special occasions. This policy provides specific guidelines regarding the value and type of gifts or awards that may be given to employees and the characteristics that make them taxable or non-taxable.

505.1 NOMINAL GIFTS

1.1 Non-Taxable

To ensure that these gifts are non-taxable to the employee, departments must follow the IRS criteria outlined below:

(a) Dollar Limit – The gift value cannot exceed $100 per individual.

(b) Frequency – The gift should only be given on an occasional basis.

(c) Form of Gift – The gift must be tangible personal property. (i.e. The gift may not be in the form of cash, check, or gift card.)

1.2 Taxable

If any of the following criteria are met, the value of the gift will become taxable and must be reported to the Controller’s Office.

(a) Dollar Limit – If the gift value exceeds $100, the entire value of the gift is taxable.

(b) Frequency – Gifts given to an employee on a regular or routine basis are considered compensation and are taxable.

505.2 LENGTH-OF-SERVICE / RETIREMENT AWARDS

2.1 Non-Taxable

To ensure that these awards are non-taxable to the employee, departments must follow the IRS criteria outlined below:

(a) Timing – The service or retirement award may not be made within the employee’s first five years of service or more frequently than every five years.

(b) Dollar Limit – The cost or value of the award cannot exceed $400 and should be commensurate with the number of years of service being recognized. If a service award is given in the same calendar year as a retirement award, the combined value cannot exceed $400.

(c) Form of Award – The award must be in the form of tangible personal property. (i.e. The gift may not be in the form of cash, check, or gift card.)

(d) Meaningful Presentation – The award must be presented as part of a special event or celebration that marks the occasion.

2.2 Taxable

If any of the following criteria are met, all or part of the award may become taxable and must be reported to the Controller’s Office.

(a) Timing – If an award is made within the employee’s first five years of service or more frequently than every five years, it will be considered an ordinary gift and will become taxable if the value exceeds $100.

(b) Dollar Limit – If the award value exceeds $400, any amount over $400 is taxable.

(c) Form of Award – Awards given in the form of cash, check, or gift card are considered cash equivalents and are taxable.

(d) Meaningful Presentation – If an award is not presented as part of a special event or celebration that marks the occasion, it will be considered an ordinary gift and will become taxable if the value exceeds $100.

505.3 RELATED ITEMS

4.1 Flowers/Plants

(a) A Department Head/Director may authorize the purchase of flowers/plants using University funds for the funeral of a current employee or immediate family member.

(b) A Department Head/Director may authorize the purchase of flowers/plants using University funds for an employee that is hospitalized.

(c) There may be other occasions where it is in the best interest of the University to send flowers/plants to individuals (e.g. donors, governing board members, etc.). In such cases, the purchase of flowers/plants should be coordinated through the appropriate Dean or Vice President’s office for review of the proposed purpose.