Requirements for Employee Gifts, Prizes, and Awards

SCOPE:
This procedure outlines the requirements and restrictions for gifts, prizes, and awards purchased with University funds.

AUTHORITY:
Colorado Fiscal Rule 2-1
Colorado Personnel Rule P-3-21
IRC Sections 74, 132, 274

DEFINITIONS
Cash Awards:
Cash payments to an employee for any purpose constitute gross wages, which are subject to taxation. These are outside the scope of this procedure. Refer to Human Resources and Payroll procedures for hiring, contracting and personal service agreements. Cash awards include gift certificates that can be converted to cash.
Non-Cash Awards:
Non-cash awards include tangible property or restricted, non-negotiable gift certificates for goods or services.

De Minimis:
In general, non-cash awards to an employee are taxable. However, "de minimis" fringe benefits that are so small that accounting for them is unreasonable or administratively impractical are not taxable to the employee. UNC has established a $99 threshold for de minimis fringe benefits.

Retirement Award:
Tangible property presented to an employee upon retirement from the University.

PROCEDURES

• Gift certificates that can be converted to cash may not be purchased for employees with University funds.
• Small employee awards for noteworthy accomplishments may be made by University governance groups or through a recognized university program. Awards are limited to tangible property or restricted, non-negotiable gift certificates. Cumulative awards to an employee in any year shall not exceed $99. Individual departments may not purchase employee awards with University funds.
• Gift certificates or tangible property donated to the University for employee prizes and awards (e.g., Colorado Combined Campaign drawings) are permissible but may be subject to taxation. Any prize with a value exceeding $99 must be reported to Payroll and will be taxable wages added to the employee W-2. In addition, gift certificates that can be converted to cash must be reported to Payroll and treated as taxable wages.
• The purchase of employee retirement gifts with University funds is not permitted.
• None of these procedures should discourage departments from taking up collections to present gifts to employees for special occasions, accomplishments or retirement.

Date Issued: January 29, 2003
Issued By: Michelle Quinn, Assistant Vice President-Finance

Questions may be directed to the Human Resources or Payroll department.