14.financepicjanEvery year we provide bonuses and gifts to our employees at Christmas time. Is there any way to give these and not include the amounts on the employee’s W-2 forms as taxable income to them?

According to the current regulations, any bonus paid to an employee is considered as normal income and must be included on the employee’s W-2 form. These bonuses are to be treated as normal income just as the salary or wages. They should be reported on the quarterly (or annual) payroll tax report and put on the W-2 form.

In general, gifts to employees are also to be treated as taxable income. According to the current regulations, the value of a turkey, ham or other nominally valued item distributed to an employee on holidays is not to be considered as taxable income. However, the distribution of cash, a gift certificate, a gift card, or a similar item of value readily convertible to cash must be included in the employee’s income and put on the employee’s W-2 form.

Gifts at Christmas to the minister must also be considered as taxable income to him/her if the funds are paid by the church out of one of the church’s banking accounts. These amounts must be included as taxable income on the W-2 form.

 

Similar Articles

Leave a Reply