IRS regulations state that cash awards and gift certificates are a taxable fringe benefit to the employee and must be added to taxable wages. Cash, gift certificates, gift cards, or other cash equivalents which are given to employees as gifts or awards are all considered taxable fringe benefits. Amounts paid to employees as bonuses in addition to their usual compensation must also be added to taxable wages.
Please note that when it comes to cash awards or cash equivalent, there is NO de minimus amount per the IRS.
Complete either the Guiding Principles Cash Bonus Request (LCHR-46) or Non-Cash Bonus Award Form (LCHR-9) and send to your Department Payroll Rep. Your Payroll Rep will enter the Bonus or Gift Card in the employee's timecard and will upload the form to the employee's Document Manager. If the Bonus will be more than $500, please send the form to HR Payroll at hr_etime@co.larimer.co.us rather than your Department Payroll Rep for processing.
Longevity and Employee of the Month awards are now rewarded with Nectar Rewards points. This is administered by the Human Resources department, and the award information is given directly to Payroll to process for tax purposes. No form is necessary for this program.
The Payroll system will calculate the taxes due on the value of all awards or gifts. To be Non-Taxable, an award/gift must be tangible personal property. However, the IRS has set dollar limits on the average cost of all such awards and gifts. So, if you have any questions on the tax liability of gifts and awards you would like to give to your employees, please contact the HR/Payroll Department.
Please contact your HR Generalist if you have questions about Guiding Principles Bonuses or Non-cash Awards.
