The eGifter Rewards team frequently fields questions about tax implications related to gift cards used for employee compensation, employee gifts and banking rewards programs. While we cannot dispense accounting or legal advice, we can refer to IRS regulations about gift card taxation. The IRS excludes gift card incentives from De Minimis Fringe Benefits. In other words, “Cash or cash equivalent items provided by the employer are never excludable from income.” “Gift certificates that are redeemable for general merchandise or have a cash equivalent value are not de minimis benefits and are taxable.” That means you need easy to manage tax reporting for gift rewards to employees in the form of gift cards.
At eGifter Rewards, our job is to make your job easier. So when it comes to tax reporting for gift cards, we have you covered. The “Gift Card Recipient Report”, accessible from the eGifter Rewards portal, makes it easy. With it, you can handle payroll tax preparation and reporting for your incentive or reward program.
…Easy to Use.
The report can be generated against a specified date range, such as a fiscal or calendar year. The result will reflect all individuals who received gift cards and the related value. All reports in the eGifter Rewards Portal can be exported and opened in Microsoft Excel. Simply forward the spreadsheet to your payroll department or accountant, on demand. Or, import it to your internal HRIS software.
Service Employees, Freelancers, Independent Contractors
Do you send gift cards to individuals outside your organization? No problem. If they received more than $600, they’ll need to complete form 1099. Of course, you should always consult your accounting team for guidance on tax related matters. That said, rest assured eGifter Rewards provides the reporting and compliance tools you need to get the job done.