🎁 Starting to think about Holiday Gift-Giving?
If your business gives out year-end gifts to employees, here is a quick guide to what counts as taxable income and what does not:
- Non-cash prizes: Include the fair market value in wages subject to FIT, FITW, FICA and FUTA
- Nontaxable gifts: Fruit baskets, hams, turkeys, wine, flowers and entertainment tickets to a show, sporting or other event (but not season tickets) generally are de minimis (nontaxable) fringes if given infrequently
- Taxable gifts: Cash or cash in kind (gift certificates) for any amount are wages subject to FIT, FITW, FICA, and FUTA.
➡️ So what does this mean? It means that a gift certificate for a turkey is taxable, but an actual turkey is not 🦃!