• Calculators and Tools
• Compliance Connection
• Economic Stimulus Plan
• White Papers, Case Studies & Magazines
• Events
• Industry / Vertical Markets
• Reference Materials / Demos
• Newsletters
  • ADP Advisor
    • Download Current Issue
    • Archived Issues
    • Ask the ADP Advisor
    • Cost Effective Solutions
    • HR professionals can network in WorldatWork Online Community
    • New release of ADP time and attendance solution for small business even easier to use
    • New tax and compliance classes available at no charge on Learn@ADP
    • See ADP Solutions in Action
    • RSS feed for the ADP Advisor now available
    • Start preparing now for year end 2009
    • Many key tax figures to remain the same in 2010
    • Credits for December COBRA subsidies must be claimed in 4th quarter Form 941
    • Free online calculator estimates potential savings from automating time and attendance
    • Helpful Hints for 401(k) Plan Administrators
  • Public Sector
  • Sales/Use/Value Added Taxes
  • Tax Researcher
  • Tech Flex
  • UCS Update (Total Tax)
  • UI Forum (ADP Unemployment Group)
  • UI Forum (UCM)
• Testimonials
• Training

ADP Advisor ®

Winter 2009 | Volume 20 No. 1

---

Ask the ADP ADVISOR ®

Must we report holiday gift certificates as part of an employee’s taxable income?

Q: For this year’s holiday season, we are planning to give each of our employees a gift certificate to a well-known retail store. Must we report this gift as part of their taxable income?

A: Consider giving a turkey instead. When you give employees cash, a gift certificate, or a similar item that they can easily exchange for cash, you must include the value of that gift as extra salary or wages, regardless of the amount involved.

On the other hand, when you give employees a turkey, ham, or other item of nominal value at Christmas or on other holidays, they do not need to include the value of that gift in their reported income.

To submit questions for possible inclusion in future columns, visit Feedback to the Editor. If legal, accounting, or other professional assistance is required, the services of an attorney or certified public accountant should be sought.