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Showing posts from December, 2015

Are Gift Cards Taxable Income to Employees?

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This time of year we get lots of questions about giving gifts to employees.   Are employee gifts taxable to the employee?  What about gift cards or certificates? The answer depends on the type of bonus or gift that you give.  Each have varying tax consequences.  Let's take a look at some of the most popular ones and their tax treatment. Cash Bonus Giving a cash bonus to employees during the holidays, or anytime throughout the year, is treated as taxable  income to the employee regardless of the amount.   The amount of the bonus will be subject to payroll and income taxes as if they were normal wages.    Non-cash Gifts A small property gift given to an employee will most likely be excludable from income as a de minimis fringe benefit.  The term  de minimis  is generally used to describe something that is too small or insignificant to be considered, something unimportant.  It actually comes from a Latin phrase, "de minimis non curat lex," meaning the law