G-31-7.1 Employee Gifts and Events
The College provides awards and gifts to employees in the following forms; 1) employee achievement awards (qualifying recipients determined through HR Dept.); 2) length of service awards (qualifying recipients determined through HR Dept.); and 3) full-time employee retirement gifts (qualifying recipients determined through HR Dept.) These awards/gifts cannot exceed $250 and must be in the form of tangible property (e.g., plaques, pen-sets, coffee mugs, clothing, etc.) and cannot be cash, cash equivalents (e.g., gift cards) or other non-excludable awards (all considered taxable income by the IRS). Annual employee achievement awards have a cash value of $1000, are paid to the employee through payroll, and are considered taxable income.
Staff or departments may want to recognize employees for outstanding achievement, or length of service with a reception, party or lunch. It is disallowed to expend college funds for these purposes. The Department may however, seek approval to use some or all of the $250 available for a retirement gift at an open, on-campus retirement event. If the Department would like to use additional funds, they must get their appropriate SLT Member approval.
De Minimis (Minimal) Benefits:
https://www.irs.gov/pub/irs-pdf/p15b.pdf
The IRS does not give specific rules or dollar amounts defining de minimus. COCC defines de minimus as employee awards, gifts, or giveaways valued at $100 or less. De minimus awards, gifts, or giveaways are excluded from payroll taxes. Cash and cash equivalent fringe benefits (gift cards, gift certificates) are never excludable as a de minimus benefit. Cash and cash equivalent fringe benefits, gift cards, gift certificates are always taxed.
For COCC events that include giveaways where entries are based on attendance or other non-financial entry, the total value of a prize awarded to a COCC employee is exempt from payroll taxes if the item has a fair market value of $100 or less. Any prize valued at $101 or more is non-exempt and will be taxed.
Gift Cards, Cash or Cash Equivalents:
IRS Publication 15-B (2022) states:
“Cash and cash equivalent fringe benefits (for example, gift certificates, gift cards, and the use of a charge card or credit card), no matter how little, are never excludable as a de minimis benefit.”
Departments may want to provide gift cards/certificates to non-employee individuals (e.g., volunteers, speakers, students, etc.) to acknowledge their contributions to the college. Gift cards issued using college funds must comply with the following guidelines:
- Must be for small amounts ($5.00 - $25.00).
- Must provide justification (college purpose) for gift cards issued
- Can’t be used in lieu of pay
- Departments must maintain detailed log for gift cards including:
- The number of cards purchased and denominations
- Cards issued (to whom and for what purpose)
Cards issued to employees must be reported to Payroll, as taxable income.
Effective date 11/22/2022