Federal Tax

Are Holiday Treats Taxable?

Are holiday treats from employers taxable? With employees working from home during the holiday season, some employers may want to stay connected to them by providing them with small goodies. For example, Halloween treat bags or a coupon for a free pumpkin from a local farm. Generally, such gifts fall under the “de minimis fringe benefit” rule if the fair market value is so low that it’s unreasonable to account for them. In that case, the item is excludable from employee income. If a coupon is included, it will most likely be taxable if is exchangeable for cash. In the same way, cash or cash equivalents (such as a gift card) are always taxable. Here’s more.  For additional information, reach out to Cg Tax, Audit & Advisory. © 2020