Gift cards or certificates must not be purchased with a procurement card or charged to sponsored funds accounts unless the gift is for human participants.
Tax Reporting for Employees
Report all cash awards, gift cards, or gift certificates over $75
to the University Tax Office using the Gift Card/Certificate Reporting Form
A nonnegotiable gift card that only confers the right to receive tangible personal property (such as department store or other retail gift card), which are not redeemable or exchangeable for cash, is excludable from tax income up to $75 as a de minimis
fringe benefit under IRS regulations.
Employee Achievement Awards
Gifts of tangible personal property (other than cash, a gift card or certificate that is redeemable in cash, or a cash-equivalent item) given as an award for length of service or a safety achievement is excluded from taxable income, limited to a cost of up to $400 received during the year, or if the value of the award is minor (e.g., Cornell merchandise such as clothing, mugs, etc.).
Human Resources - Appreciation and Recognition Awards
Cornell Appreciation and Recognition awards or "Spot" recognition awards are not considered taxable income to employees. The Appreciation and Recognition Award program provides nonnegotiable Amazon points or a Cornell Store gift card that only confers the right to receive tangible personal property, which are not redeemable or exchangeable for cash, and are excludable from taxable income up to $75 under IRS regulations.
Tax Reporting for Non-Employees
Report cash awards, gift cards, or gift certificates over $75 to the University Tax Office on the Gift Card/Certificate Reporting Form for inclusion in IRS Form 1099 or 1042-S database for year-end tax reporting.
For U.S. citizens and U.S. resident aliens, no IRS Form 1099 is generated unless all payments received by U.S. citizens or U.S. resident aliens exceed the reporting threshold of $600 annually.
For foreign nationals/nonresident aliens, IRS Form 1042-S is generated for all payments received and reported. Because the IRS-required 30% tax was not withheld, the unit will be charged the 30% tax, based upon the amount of the gift card or gift certificate provided.
Any questions regarding the forgoing rules should be sent to the University Tax Office.
Human Subject Payments
Exceptions are permitted when providing gift cards for human subject or research participants. Consult Cornell's Institutional Review Board for Human Participants or Survey Research Institute. Departments should maintain all relevant private payment information for possible tax reporting.
Gift Card/Certificate Reporting Form
This form should not be used to report gift cards or certificates given to research participants.
To ensure compliance with IRS rules, the Gift Card/Certificate Reporting Form (PDF, 45 KB) must be completed when a faculty or staff member purchases a gift card or gift certificate for an individual or individuals (including current and former students, current and former or retiring employees), and preferably before the gift card/certificate is presented.
If a unit fails to submit this form and the university is audited by a tax authority for this issue, the unit will bear any costs associated with failing to comply.
- Inform the gift card/certificate recipient that the amount of the gift is taxable and, if they are an employee, it will be included in their taxable compensation and that their net take-home pay will be reduced in a future pay period as a result of the additional payroll taxes on the gift amount. If the individual is not an employee, inform them that they will receive IRS Form 1099-MISC at the end of the calendar year reporting the value of the card, if required under IRS rules.
- Complete the form:
- If only one person will receive the gift card/certificate, complete sections 1 and 2.
- If more than one person will receive a gift card/certificate, complete sections 1 and 3. If you need to report more than 20 individuals, copy section 3 and attach as many sheets as necessary.
- Ensure that the unit's business officer or dean has approved and signed the form in section 1.
- Ensure that the gift card/certificate recipient(s) sign the form in sections 2 or 3 as applicable.
- The preparer of the form must submit the completed form to the business service center director for final review and approval.
- The business service center director must review, sign (in section 1), and submit the form to the University Tax Office with "Gift Card Report" in the subject line.