Jump directly to the content

Reporting Gifts on W-2s

Are gift certificates to church staff taxable?

We provide every employee with a gift certificate of $20 on his or her birthday that can be used at a nearby restaurant. We have always assumed that these gifts are not taxable income, and so we have not included them on employees' W-2 forms at the end of the year. But a few staff members insist that this is a taxable fringe benefit. Who is correct?

In general, a de minimis benefit is one for which, considering its value and the frequency with which it is provided, is so small as to make accounting for it unreasonable or impractical. De minimis benefits are excluded from tax under section 132(a)(4) of the tax code and include:

Occasional employee use of photocopier
Occasional snacks, coffee, doughnuts, etc.
Holiday gifts
Occasional meal money or transportation expense for working overtime
Flowers, fruit, books, etc., provided under special circumstances
Personal use of a cell phone provided by an employer primarily for business purposes

Article Preview

This article is currently available to ChurchLawAndTax.com subscribers only. To continue reading:

LoginorSubscribe
Related Topics:
From Issue:
Church Finance Today, 2013, December
Posted November 21, 2013

Related Resources

See All
from our store
20 Finance Questions Churches Ask eBook

20 Finance Questions Churches Ask eBook

Richard Hammar shares his answers to 20 of the most widely asked and relevant tax and finance questions for church leaders.
2014 Church & Clergy Tax Guide

2014 Church & Clergy Tax Guide

Get a comprehensive understanding of tax laws as they relate to pastors and churches.
Preventing Top Tax Pitfalls

Preventing Top Tax Pitfalls

Learn the background you need on tax laws to know what questions to ask.
Does Your Church Owe Taxes on Alternative Revenue?

Does Your Church Owe Taxes on Alternative Revenue?

How unrelated business income, and the possible taxes owed from it, works for churches.
browse
Follow us:Church Law & Tax on FacebookChurch Law & Tax on TwitterChurch Law & Tax RSS FeedsChurch Law & Tax on Youtube

Shopping