which recognizes the employee for their extra efforts, and so forth. An employee will receive a gift certificate for a specific online company. However, our company states that all employees will get taxed on gifts received. i.e., gift certificate for xmas from the company $50 the employee has to pay the tax on the card. Is this legal? I don't think it is a very good incentive for employee's to pay tax on their own gift from the company.
Gem
Favorite Answer
Per the IRS not only is it legal, it would be illegal for you not to pay the taxes.
Just another way the IRS sticks it to us little guys.
But hey, they have to figure out a way to continue paying their own employees for LIFE.
Mark S.
I believe that it depends on the state for the tax laws. If you're still looking for gift giving ideas for employees, check out www.rlanz.ordermygift.com A friend of mine started this gift album company and it works out pretty well.
Anonymous
Here in Canada there are no taxes on gifts or lotteries, so it would be effective here. If I had to pay taxes on a gift, I would not accept the gift. I think its a poor incentive.
Moby
Even gifts are considered taxable income. Most employers give gift cards, since the expense is tax deductable to the company.
Anonymous
It all depends on your country/state and the tax codes that govern them.