Reporting of Taxable Gifts, Awards, Prizes and Other “Perks”
Certain gifts, awards, and prizes given to faculty, staff members, or students must be reported to Human Resources so the value can be added to the employees’ taxable income and the appropriate taxes (Federal withholding, Social Security and Medicare) collected from the employees’ pay.
Cash awards, gift cards, and gift certificates of any value are always taxable to the employee and must be reported at the time the gift or award is given.
Some non-cash gifts of nominal value may be excluded from the reporting requirements if the value of the award is so small that accounting for it would be difficult. The Internal Revenue Service has not set a specific dollar maximum at which an item becomes taxable. Examples of such “perks” would be:
Coffee and doughnuts provided to employees.
Traditional holiday gifts (candy, turkey, etc) of a relatively small value.
Occasional T-shirts or other apparel of small value for special events.
Occasional tickets for entertainment or sporting events.
Occasional parties or picnics for employees.
Taxable gifts are reported to Human Resources using the “Reporting of Taxable Fringe Benefits” Excel worksheet ( Taxable Fringe Reporting Form.xls ).
A corresponding transaction listed as “Taxable Gift,” “Taxable Award,” or “Taxable Miscellaneous” will appear in the Earnings section of one the faculty or staff members’ future paychecks.
Taxable Relocation Expenses
Taxable and non-taxable relocation (moving) expenses are reported to Human Resources on a quarterly basis by the Office of Disbursement Services (University) and Department of Finance (Medical Center). The transactions are reflected as “Taxable Relocation” and “Non-Taxable Relocation” in the Earnings section of one the faculty or staff members’ future paychecks. The appropriate taxes are collected based on the amount of the taxable relocation amounts.
Rewards and Recognition Program (Medical Center)
Taxable awards provided to staff through the Medical Center’s Rewards and Recognition Program are reported on a monthly basis by the Compensation Office in Human Resources. The transactions are reflected as “Rewards and Recognition Award” in the Earnings section of one of the staff members’ future paychecks. In addition, a separate transaction entitled “Rewards & Recognition Tax Credit” will be reflected in the same section of the staff members’ paystub. This transaction is the tax “gross-up” on the taxable transaction (i.e. Vanderbilt pays the taxes on behalf of the employee).
Questions concerning the reporting requirements or procedures may be directed to the HR Employee Service Center at 615.343.7000.