Reporting of Taxable Gifts, Awards, Prizes and Other “Perks”
Certain gifts, awards, and prizes given to faculty, staff members, or student employees 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 events.
- Flowers, fruit, books etc., provided under special circumstances or other similar property provided to employees under special circumstances e.g., on account of illness, outstanding performance, or family crisis.
- Occasional parties or picnics for employees.
Cash and cash equivalent items (i.e. gift cards) are never considered de minimis and must be reported as income to the employee.
Meals provided to employees working from home (whether in the form of a gift card, meal delivery service or expense reimbursement etc.) are never considered de minimis and must be reported as income to the employee.
Occasional non-cash gifts valued less than $75 are considered non-taxable to the employee as the administrative burden of accounting for them is unreasonable. The $75 threshold is consistent with Vanderbilt’s Travel and Business Expense Policy threshold for providing receipts which is in line with federal substantiation requirements under Treasury Regulation section 1.274-5.
The entire value of all non-cash gifts valued over $75 are considered taxable income to the recipient; not just the excess amount over $75.
Read more on the De Minimis Fringe Benefits Policy page.
Taxable gifts should be submitted through Oracle under award compensation for employees within your department by the manager or the HCM. Details for entering award compensation and a list of elements can be found in Oracle Guided Learning by searching for award compensation. If you are awarding a gift to an employee in another department contact firstname.lastname@example.org for assistance.
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. 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.
Questions concerning the reporting requirements or procedures may be directed to email@example.com.