Medical expensesSeptember 27, 2019
2020 TAX UPDATESFebruary 10, 2020
Gifts and awards as taxable employment benefits
We are mostly aware about popular taxable or not taxable benefits – if you are using a vehicle of the company that provides you an employment or a cell phone plan. Those benefits are on the surface and are well monitored by accounting departments of corporations. There happen to be some examples of perks that are not so obvious at a glance, but may crystallize into a taxable employment benefit.
- You are using a credit card in the corporation and collect points. Not to waste them you buy a ticket for your family vacations. They are not cash, you did not actually buy them through a regular purchase transaction, they got converted from nothing – points. The value of the items redeemed will be a taxable employment benefit. Even if it is an internal points system where an employee earns points and can redeem them for items from catalogue.
- Many corporations want to thank their employees through the year and present them gift cards for a value of $200 to $1000 as Christmas gifts. This is not cash, but a value that you may transfer into any purchase- be it clothes or cosmetics at your choice. Nice gift, but tricky. The value should be added as a taxable employment benefit.
- Big corporations used to have huge amounts budgeted for team building. It is important to have a team spirit among your employees, but if your employer provides a team-building lunch or other rewards in the nature of a thank you for doing a good job, the value of this hospitality reward becomes a taxable employment benefit.