Awards, Prizes, and Gifts

Distributing service awards, wellness incentive program prizes, and gift cards/certificates is a way for the College and managers to reward or thank staff members. Any award, prize, or gift issued to a staff member for performance that goes above and beyond their responsibilities, or any other work-related achievement are generally considered taxable under Federal Tax laws and is subject to withholding since it was made in connection with and because of an employment relationship. Limited exceptions are described below.

The College relies on managers and supervisors to follow the procedures below to ensure that awards, prizes, and gifts are properly accounted for and that any required taxes are recorded and withheld. It is the responsibility of the manager issuing the award, gift, or prize to notify the staff member of the possible tax implications.

Any cash award, prize, or gift is taxable and must be processed through the Payroll Office. Cash awards should be recorded on the Request for Additional Pay Form (pdf) and the completed form sent to Compensation. Gift cards, gift certificates, prizes, and gifts must be reported on the Award, Prize, and Gift Form (pdf).

Please note that occasional gifts (or prizes) of merchandise (e.g., flowers, Campus & Community Store items and apparel) that are of nominal value are not taxable and need not be reported. However, items of more than a nominal value are taxable and must be reported to the Payroll Department prior to issuance on the Award, Prize, and Gift Form (pdf). If you are unsure whether a gift or prize needs to be reported for tax purposes, please contact the Payroll Office.

Forms should be submitted before the award, prize, or gift is given to the staff member. Within the next payroll processing cycle the face value of the award, prize, gift, or certificate will be added to the staff member's paycheck and the required taxes will be withheld.