Taxable Transactions and Financial Operations Guideline Change

The following is from Financial Operations regarding the treatment of gifts and awards to University Employees:

Gift Cards, certificates, cash, checks, and direct deposits are always taxable income to an employee under IRS guidelines.  The Internal Revenue code (IRC) section 132(a) states that "de minimums fringe benefits" are considered non-taxable, except when they are in the form of gift cards, certificates or coupons.

Generally, the IRS considers all employee gifts and awards to be taxable income.  However, the IRS does provide exception for "de minimums fringe benefits".  Their practices have shown the following:

A. The gift/award must be of "small value and frequency"
B. Anything above $50.00 is to be considered taxable to the employee

Some common "de minimums benefits" include occasional departmental parties or picnics; occasional dinner money due to overtime work; occasional tickets (not seasonal tickets) to the theater or sporting events, coffee, donuts and soft drinks; group meals; flowers, fruit, books, turkeys and hams or similar property provided under special circumstances such as illness, outstanding performance, or family crisis provided that the requirements of the IRS rules are met. 
Distribution of any cash benefit, regardless of the dollar value is never excludable.  Gift cards, certificates and coupons are considered by the IRS to be a cash equivalent.

Because of the difficulty of tracking taxable wages from gift cards, effective immediately the purchase of gift cards and certificates for ACU employees is no longer allowable.  If a gift card or certificate is purchased for an employee, the department who purchased the cards needs to alert payroll of the purchase.  The value of the gift card or certificate will then be added as taxable wages to the recipients W/2.


Due to the results of an internal audit on ACU Purchasing Card transactions, the University has recognized a need for changes to its Purchasing Card policy.  The policy change below is effective immediately:

  • Reallocations of Purchasing Card transactions will continue to be due on the 7th of each month following the month in which Purchasing Card charges occur.
  • Signed expense reports with proper approval signatures and all original invoices or receipts attached are due in the Accounts Payable office by the second Friday of the month following the month in which Purchasing Card charges occur.
  • If a properly completed report is not received by the second Friday of the month, the cardholder and the cardholder’s supervisor will receive a letter indicating that the required documentation was not received.
  • If the report is still not received by the last Friday of the month, the cardholder’s account will be inactivated until the required documentation is submitted and reviewed by Accounts Payable.
  • The dates for each expense report must begin on the first day of the calendar month and end on the last day of each calendar month in which expenses occur.

Please notify Meredith Morgan at if you have any questions about this policy.