Tax Rules for Gifting to Employees Updated

IRS Clarifies Rules for Gifting to Employees

Giving non-monetary awards or gifts to staff can still be considered a grey area with regards to income tax. However a recent clarification by the IRS, made the rules simpler by stating that non-monetary awards will not qualify for income tax as long as they are available to all staff. This strengthens the rules that monetary or convertible awards, such as a grocery voucher, would be taxable.

According to the IRS, “If an employer distributes turkeys, hams, or other merchandise of nominal value to its employees at holidays, the value of these items would not constitute salary or wages”.

Giving a Christmas Gift to the staff has become slightly simpler.

 

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