Gifts, Awards and Prizes
Purpose
This policy discusses the limitations placed on employee recognition and gifts, awards and prizes to employees and institutional gifts (i.e. donations).
Policy
The IRS requires that prizes, gifts, and most awards above a nominal amount be reported as taxable income. The college must therefore provide for proper accounting treatment in the limited instances where such gifts and awards are allowable. This policy allows occasional modest gifts to be made to employees for recognition, length of service, individuals who depart after many years of service and for expression of sympathy. Purchases under this policy should not be made on the college’s Pcard and instead be submitted via Etrieve.
Employee Recognition and Gifts
Expenses incurred in connection with expressions of congratulations toward employees are allowed only as occasional, modest expressions of support and recognition on behalf of the college. Additionally, gifts provided by the college as a door or raffle prize to incentivize participation are allowed on occasion as well. These gifts should not exceed $75 in value to any individual, unless approved in advance by the Vice President of Finance and Treasurer.
College funds may not be used to purchase personal gifts for any individual in recognition of events such as birthdays, weddings, housewarmings, births, or holidays.
For retirements or other departures of long-standing employees (at least ten years of service), non-cash gifts commensurate with the years of service can be provided, but should not exceed $200 without prior approval from the Vice President of Finance and Treasurer. (Please note that gift cards are considered to be the same as cash.) Similarly, a department may conduct a reception or lunch to recognize the departure or retirement of an employee. Gifts from college funds for employees who have been here less than ten years need to be pre-approved by the Vice President of Finance and Treasurer.
Expenses incurred in connection with expressions of sympathy or support toward employees are allowed only as occasional and modest expressions not to exceed a value of $75. Examples of such support would include death, serious illness or hospital stays for employees, students, or immediate family members.
Institutional Gifts
In a limited number of instances the college may want to make a donation, contribution, or sponsorship to another organization. In all such cases the contribution needs to be approved in advance by the Vice President of Finance and Treasurer. This includes payees of honorariums who wish to have their payment directed to a charitable organization.
Tax Implications
Any gift, award, or prize of tangible personal property in excess of $75 in value will be included in the recipient’s gross income and subject to applicable withholding. Any gift cards given as a gift, award, or prize will be included in the recipients gross income and subject to applicable withholding, regardless of the amount. Please see Accounts Payable for procedures on how to report gift cards.
For gifts for employees for retirement or length of service, please contact the business office for tax implications.