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#1
11-27-2006, 10:34 AM
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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 
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#2
11-27-2006, 03:18 PM
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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.
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#3
11-29-2006, 10:02 AM
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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 at 10:03 AM.
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