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Gift Cards Taxability

Corporate Law Discussions

Gift Cards Taxability

Postby Sid » Thu Dec 15, 2016 7:24 pm

s About Taxes)/Gift Cards Taxability Advertisement Expert: John Stancil, CPA - 7/22/2009 If a company purchases gift cards to be given out via a drawing at a company function and everyone in attendance, employees and non-employees, are eligible to win, would the company be required to tax the gift card and report it as taxable earnings for the employees that win?  Or would this fall under "gambling winnings" and become the responsibility of the winner to report the income on their personal income tax return?
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Gift Cards Taxability

Postby troyes » Fri Dec 16, 2016 1:13 am

Susan,

Thanks for your question.

The IRS considers gift cards the same as cash, so you would have to include the value of the card in the employee's taxable earnings.  Also, any family members winning a card would be included on the employee's earnings.

Unrelated non-employees you have no reporting responsibility for unless their winnings are $600 or more.

Hope this helps.

John Stancil, CPA
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Gift Cards Taxability

Postby Eadward » Fri Dec 16, 2016 6:45 am

s About Taxes)/Gift Cards Taxability Advertisement Expert: John Stancil, CPA - 7/22/2009 If a company purchases gift cards to be given out via a drawing at a company function and everyone in attendance, employees and non-employees, are eligible to win, would the company be required to tax the gift card and report it as taxable earnings for the employees that win?  Or would this fall under "gambling winnings" and become the responsibility of the winner to report the income on their personal income tax return?
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