In the event a department chooses to provide a gift in lieu of payment to an individual (non-employee), the gift may be taxable. Gifts purchased with university funds are taxable to the non-employee recipient, per IRS regulations, if any of the following statements are true:
- The aggregate value of the gift is greater than $75; or
- The gifts are provided on a routine basis; or
- The gift is provided in the form of cash(i.e. cash, check, gift card, gift certificate, etc.).
If a gift provided to a non-employee is deemed taxable as per the above guidelines, then the value of the gift provided must be reported to the individual as taxable income.
The reimbursem*nt/payment request must include and must comply with University reimbursem*nt procedures:
- a completed W-9 form (or other appropriate forms if the individual is not considered a United States resident for tax purposes)
- an acknowledgment from the recipient that the gift was received
*Please note: If the combined total of the value of the gifts received and compensation for services rendered exceeds $600 in any calendar year for a non-employee, a Form-1099-MISC will be issued.
Non-Employee Gift/Cash/Gift Card/Gift Certificate categories:
- Aggregate Value of a Gift Item Over $75
- Aggregate Value of a Gift Item Under $75
- Gifts Provided on a Routine Basis
Definition:
Gift:a gift isanything you give to another person — cash or property — without getting value in return
Forexample; gift baskets, gift certificates, gift cards, e-cards, cash, etc.
**Gifts given to students for employment-related services or activities must comply with Human Resource’s policy regarding gifts to employees
** Gifts given to students who are not Loyola employees or to student employees for non-employment related activities (survey participation, department awards, etc.) must comply with the policy for non-employee gift purchases
Procedure for purchasing a gift, other than gift cards or e-cards:
Less than an aggregate of $75 – this is not taxable to the recipient and may be purchased or reimbursed to the employee via a check request
More than an aggregate of $75 – this is taxable to the recipient. The University requires a completed W9 form, an acknowledgment that the gift was received, and a receipt of purchase. This will be reimbursed via the check request process
Gifts made on a routine basis – are taxable depending on if the aggregate value exceeds $600 during the calendar year. Taxable items require a W9, an acknowledgment of receipt, and a receipt of purchase.
Gift cards or e-cards, cash or check:
These items regardless of value are ALWAYS taxable to the recipient.
To purchase these items reimbursed via check request (either as an advance to the employee or post-purchase), the employee must collect the following:
- A W9 from each recipient
- A written confirmation of receipt of the gift card/e card
- A purchase receipt of the e-card or gift card
- Completion of the University gift card/ecard form
** Normally the University does not permit departments to use the University credit card for such purchases, however exceptions may be granted. In that case, the same documentation is required, and should that documentation not be supplied the gift cards or e-cards become taxable to the employee who purchased them
