:::: MENU ::::

Gift Certificates as de Minimis Fringe Benefits

  • Posted
  • Sep 02, 2014
What's New

Gift Certificates as de Minimis Fringe Benefits

RC132 deals with de minimis fringe benefits. If you take a look at the way the statute is written, three things to consider are the frequency, the amount, and the administrative burden involved in tracking these things. And remember that “administrative burden” in today’s environment is much different than it was when this section was written. On the subject of frequency, a common situation involves an employer that provides a gift certificate to its employees for a holiday ham. If that happens for all employees once a year, it would be considered to be a de minimis fringe benefit under 132. On the other hand, if that same company were to provide those employees a ham every quarter, then it wouldn’t be considered to be a de minimis fringe benefit and it would be taxable. When we talk about gift cards or gift certificates, the idea is that they can be used as cash or if they are a cash equivalent, they are never going to fall into the de minimis fringe category. That’s a bright-line test you can use, even where the amount is only $10-$15.
 – APA, Payroll Currently, July 4, 2014 Issue

OCCAPA: Network. Learn. Succeed.