 |
| |
I am the treasurer for my church, and I wondered if there
was any difference in the tax treatment for employees of
the church whether christmas gifts given to the pastors
and staff are in cash or a non-cash gift? Would it make
any difference if the gift were a gift-certificate from
a retail store instead?
Tax status of employee Christmas gifts? |
| |
 |
| |
Gifts, in any form, are not taxable to the recipient. Cash and cash-equivalents (such as gift certificates) are *always* taxable wages and subject to applicable withholding
taxes. Non-cash benefits such as turkeys, flowers, theatre
tickets, clothing, etc. are nontaxable *if* the item
qualifies as a deminimis fringe benefit. Generally, a
deminimis fringe benefit is an item "the value of which is
so small as to make accounting for it unreasonable or
administratively impracticable." There is no bright line
test for determining whether an item's value is so small
that is qualifies for tax-free treatment. Many employers
consider $100 a reasonable cut off point although the IRS
frequently tries to assert a $25 limit. See IRC 102(c) which provides that the normal exclusion from
income for gifts does not apply to employer / employee
situations. |
| |
 |
|
| |
| |
