Contributions, Gifts, and Awards Expenses

Key terms within this section are:

Contribution

De Minimus Limits

Employee Achievement Awards

Gift

Gift Card

Non-Cash Item

Tangible Personal Property

Raffle & Door Prize

Recruitment, Soliciting Donors, and Hosting

Please refer to the Key Terms and Definitions page.

Gifts or awards of value should meet the following criteria: 

• Infrequent 
• Reasonable and modest 
• Not provided as personal gratitude or in lieu of compensation 
• Conform to Internal Revenue Service (IRS) regulations and state ethics limitations

Taxable Income for Gifts and Gift Cards Provided to Employees 

The value of non-cash gifts provided to employees which exceed the $100 de
minimus limit is taxable, with the exception of length of service or retirement gifts,
which are taxable when they exceed $400.

• Gift Cards are considered cash or a cash equivalent gift or award, and will be reported as taxable compensation to the employee, subject to appropriate federal, state and employment tax withholding, and must be included in the employee’s year-end Form W-2, Wage and Tax Statement.  
• Raffle and Door Prizes 
  • Non-cash raffle or door prizes provided to employees are not reportable as taxable compensation unless the de minimus limit of $100 is exceeded
  • Cash or Gift Card raffle and door prizes are reportable as taxable compensation to the employee, subject to appropriate federal, state and employment tax withholding, and must be included in the employee’s year-end Form W-2, Wage and Tax Statement.  
• Conflict of Interest: As public employees, UMass employees must adhere to state conflict of interest laws pertaining to receiving and providing gifts.

Taxable Income for Gifts and Awards Provided to Non-Employees 

• Gift cards presented to non-employees (including students who are not University employees) will be taxable and included as reportable income to the recipient (on Form 1099-MISC for US residents and on Form 1042S for foreign nationals) if the recipient receives $600 or more from the University in a calendar year.
• The University will track payments and distributions to such individuals and is required to report payments of $600 or more to US Residents on Form 1099 and to Foreign Nationals on Form 1042S.
• Note that the $600 threshold can consist of smaller individual payments in the aggregate and include cash, checks, and gift cards from multiple University departments and funding sources. 

Gifts and Awards Provided to Volunteers 

Gifts may be provided as a thank you to nonemployees volunteering time for a University initiative. Gifts may not be given in lieu of payment for services or as quid pro quo. 

Rules and Recordkeeping for Gift Cards 

The following steps must be taken for all gift cards to ensure good recordkeeping and accountability:  

• The department issuing gift certificates/cards must keep a record of all gift certificates and Gift Cards issued 
• A single individual must be designated as custodian of the Gift Cards 
• Gift certificates and Gift Cards must be secured in a locked drawer, cabinet or room and be accessible to only the designated custodian  
• Issuances of gift certificates and Gift Cards should be documented in a log (spreadsheet), containing receipts or other documentation such as email or online confirmation, including the date of issuance, purpose, amount, and signature of recipient  
• Any additional, campus-specific procedures for obtaining gift cards must be followed   

Maximum Allowance for Gifts/Awards 

• The maximum allowance for non-retirement and non-length of service gifts/awards is $100. Exceptions may be allowed but require prior approval. 
• The maximum allowance for length of service and retirement gifts is $400 for tangible items, cash equivalent items, and gift cards. 
• Limits by gift type 
• Door and raffle prizes: $100 
• Employee recognition: $100 
• Human subjects: $100 
• Employee retirement (based on years of service): $400 or University embossed chair 
• Sympathy gift (tangible item such as flowers): $100 
• All prizes and awards which are given to students for educational expenses and/or are educational in nature (laptops, lab supplies, textbooks, etc.), are considered a scholarship, and require financial aid reporting. Refer to campus Financial Aid Office.

Employee Recognition Awards 

• Employee recognition awards may be provided within an established recognition program and may not exceed the maximum allowable cost unless an exception is provided. Please note: Gift Cards are not allowed as employee recognition awards. 
• Campuses have the discretion to delegate authority to departments to recognize an employee for outstanding work-related accomplishments. Awards must be presented to employees based on objective criteria as part of a ceremonial event held at the departmental level. 

Employee Length of Service Awards 

• Employee length of service awards may be provided within an established recognition program.  

Employee Retirement 

• A non-cash Gift of University merchandise, which can be purchased from any of the UMass campus bookstores, may be presented to an employee upon retirement from the University. The item must be commensurate with the nature and value of the employee’s contribution to the University.   
• Campuses have the discretion to allow Gift Cards as a retirement gift.  

Sympathy/Memorial/Extended Illness 

• Only Gifts of Tangible Personal Property, such as flowers, may be presented on behalf of the University as an expression of sympathy in the event of the death or major illness of an employee or a member of the employee's immediate family (spouse, child, parent, or sibling).  
• Campuses have the discretion not to allow issuance of Gifts for sympathy, memorials, or extended illness.   

Door and Raffle Prizes 

• Occasionally, departments may hold raffles for door prizes and other Gifts to entice employee or student participation in an event 
• If conducting a random drawing and the recipient is not pre-determined, the prize may be given directly to the winner(s) 

Human Subject Research Study Participants 

• The University may provide Gift Cards to participants in research or studies. Human subject compensation must adhere to the Institutional Review Board’s policies and procedures. 
• Gift Cards may be issued to employees when they serve as human subjects provided the service is not related to their employment. When gift cards are provided under these circumstances, the above section on Taxable Income for Gifts/Awards Provided to Non-Employees applies

• Campuses have the discretion not to allow issuance of Gift Cards for any purpose  
• Gifts, awards, and Gift Cards may not be issued in lieu of employee or non-employee compensation  
• Gifts associated with employee birthdays, weddings, baby showers, anniversaries, or other occasions of a personal nature are not allowed  
• Contributions by the University to any individual or organization directly or indirectly associated with a political party, campaign, candidate, or group engaged in influencing legislation, elections, referenda, or similar activities, are not allowed.
• Contributions made to organizations as an expression of sympathy in lieu of a tangible gift such as flowers. However, this does not preclude employees from making personal contributions and/or gathering personal employee contributions to such organizations as an expression of sympathy   
• Gift Cards may not be issued for vendor payments 
• Expenditures beyond University limits are not allowed unless an exception is provided 
• Some exceptions may be granted for non-allowable expenses but require prior approval  

The approval requirements for Contributions, Gifts, and Awards are outlined on the Approvals, Documentation Requirements, and Exceptions page.

Exceptions can be requested per the guidelines outlined on the Approvals, Documentation Requirements, and Exceptions page.