In the event that a department chooses to provide a gift in lieu of payment to an individual, the gift may be taxable. Gifts purchased with university funds are taxable to the non-employee recipient, per IRS regulations, if any of the following statements are true:
- The aggregate value of the gift is greater than $75; or
- The gifts are provided on a routine basis; or
- The gift is provided in the form of cash (i.e. cash, check, gift card, gift certificate, etc.).
If a gift provided to a non-employee is deemed taxable per the guidelines outlined above then the value of the gift provided must be reported to the individual as taxable income. To ensure proper reporting, the payment request must include a completed W-9 form (or other appropriate form if the individual is not considered a United States resident for tax purposes), as well as an acknowledgement from the recipient that the gift was received.
Oregon Tech segregates gifts into the following categories for processing and reporting:
- Gift value under $75
- Gift value over $75
- Gifts provided on a routine basis
- Cash and cash equivalent gifts (cash, check, gift cards and certificates, etc.)
Example of a non-taxable vs. taxable gift: Survey participants are entered into a drawing to win a prize upon completion of the survey. The department hosting the survey gives the winner Oregon Tech memorabilia as a token of appreciation. The Oregon Tech memorabilia is valued at $75 or less, therefore, the gift is nontaxable. If the memorabilia was valued over $75 or the token of appreciation was a gift card of any value, this would constitute taxable income for the guest.
If the combined total of value of the gifts received and compensation for services rendered exceeds $600 in any calendar year for a non-employee, a Form-1099-MISC will be issued.
Please note- This policy applies to gifts made to non-employees only. Gifts given to students who are not Oregon Tech employees or to student employees for non-employment related activities (survey participation, raffle prizes, etc.) must comply with the policy for non-employee gift purchases.
Per IRS regulations, in the event that a department chooses to provide a gift in lieu of payment to an individual, the gift may be taxable. The following procedures should be followed when purchasing gifts for non-employees:
- Aggregate Value of a Gift Item Over $75 - In the event that a department wishes to purchase a gift item for an individual with a value greater than $75, the item will be taxable to the individual. These items may include, but are not limited to, books, flowers, Oregon Tech memorabilia, etc. In order to receive a reimbursement, the individual must collect a W-9 from the gift recipient. The purchase receipt and W-9 must be provided to the Business Affairs office in accordance with the University’s reimbursement policies.
- Aggregate Value of a Gift Item Under $75- In the event that a department chooses to provide a gift to an non-employee with an aggregate value of $75 or less, the gift item will not be taxable to the recipient. These items may include, but are not limited to, books, flowers, wine, Oregon Tech memorabilia, etc. These items may be purchased by the employee and the employee may request reimbursement for the item via check request. The item may also be purchased from the Oregon Tech bookstore utilizing the procedures for departmental charges. A W-9 from the recipient of the gift item is not required in these cases.
- Gifts Provided on a Routine Basis- If a department chooses to provide gifts to a non-employee on a routine basis the advance procedures outlined in the section regarding “Aggregate Value of a Gift Over $75” must be utilized. In the event that the total value of all gifts received equal or exceed $600 during a calendar year, the items will be reported as taxable income to the recipient.
- Gift cards, Gift Certificates, Cash, Checks, etc. - These items are considered cash and/or cash equivalents and are always taxable to the recipient, regardless of the value. If a department wishes to provide a non-employee with a gift card, the employee who will purchase the card must request an advance via check request payable to himself or herself. Advance requests cannot be made payable to the vendor or the recipient of the card. The individual must collect a W-9 from the gift card recipient as well as a written acknowledgement from the recipient that the gift card was received. The purchase receipt, W-9 and acknowledgment of receipt must be provided to the Business Affairs office in accordance with the University’s advance and reimbursement policies. Failure to submit all documentation in a timely manner will result in the value of the gift card being imputed as taxable income to the employee. In the event that an advance is not requested to purchase a cash and/or cash equivalent, you must provide a W-9 for each recipient and evidence from the recipient that the item was received. This documentation is required whether the individual requests invoicing from the vendor or uses a personal credit card or other payment method and requests reimbursement.
*Please note- institutional funds may not be used to purchase any gift item, regardless of the type or dollar value of the gift.