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Holiday Gift - Taxation NON-PROFIT Nebraska

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  • Holiday Gift - Taxation NON-PROFIT Nebraska

    Please confirm - what is the law for a NON-PROFIT....in giving employees cash or a cash gift card for Christmas?

    Taxation? Is there a dollar-limit before it is taxed?
    Does the employer report it as income
    Does the employer withhold tax
    Does the employee report it separately as a gift on
    their year end Tax Return.

    Thanks and Happy Holidays

  • #2
    The law is the same for non-profits as for any other organization. Unless it is de minimus, it is taxable as wages. If you are giving them cash or a gift card for a set dollar amount, yes, you must treat it as wages.
    I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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    • #3
      Gift cards/gift certificates, etc. are simply a replacement for cash and are always taxable and yes, it goes on the W-2 and yes, taxes must be withheld. Because it is on the W-2, it is not a "gift" as you are interpreting it. And here is the definition of "de minimus" (pg 6-7):
      http://www.irs.gov/pub/irs-pdf/p15b.pdf
      Last edited by Pattymd; 11-29-2006, 09:03 AM.
      I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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