3.3.2 Gift Card Policy
This policy states the circumstances when gift cards may be allowable and the tax implications to the recipient. This policy is applicable to all Piedmont University faculty, staff and students.
According to the rules of the Internal Revenue Service (the “IRS”), because cash and cash equivalents, such as gift cards/certificates, have a readily ascertainable value, they are considered taxable income regardless of the face amount of the gift card/certificates. For employees, the value of gifts and gift cards/certificates is considered compensation subject to federal, state and employment tax withholding, and must be reported on Form W-2; there is no de minimis fringe benefit amount relating to gift cards/certificates. For non-employees, the value of all gifts and gift cards/certificates in an aggregate amount of $600.00 or more per calendar year must be reported to the IRS on Form 1099-MISC as other compensation.
Departments purchasing and distributing gift cards are responsible for compliance with IRS regulations and university policies.
Procedure:
The preferred method to purchase gift cards is the P-Card with prior approval from the Controller’s Office. After approval, each gift card/certificate purchaser should notify the Controller’s Office at the time of purchase (or shortly after) with details that include the gift card number, amount and payee information.
Examples of gift cards (list may not be all-inclusive; paper gift certificates are considered the same as gift cards):
- Anywhere/anytime cash such as Visa, American Express or money-orders
- Store gift certificates or cards that are redeemable for a large variety of commodities, such as Walmart or grocery store gift cards
- Gift cards or gift certificates to restaurants
- Gift cards to the Piedmont University Bookstore
- Virtual gift cards such as Amazon
WHEN GIFTS CARDS MAY BE PURCHASED
Gift cards must have a value of $100 or less and must be approved by the Controller’s Office
Gift cards may be purchased under the following circumstance:
- If it is for an event and not for a specific person. For example, a department may purchase a gift card/certificate as a door prize. The receipt must specify the purpose of the expense.
WHEN GIFTS CARDS MAY NOT BE PURCHASED:
Gift cards may NOT be purchased:
- For Piedmont University specifically identified active employees, students (undergraduate and graduate students, including doctoral students), or consultants employed by Piedmont University. For example, a department may not purchase a gift card/certificate for an employee for achieving specific employment milestones
- As gifts for graduating students
- As holiday or other gifts to employees or students
- To pay suppliers and consultants for goods and/or services received
Responsibilities
Controller’s Office
Makes an assessment and provides approval for P-Card gift card purchases upon request. Collects and maintains a record of all gift card purchases in a Gift Card Log in order to follow the IRS rules on 1099 income reporting. The Log will include the gift card number, payee name or participant ID. If using the participant ID, information about the participant will be maintained in a separate secure database that includes information required for tax reporting purposes.
Responsible for reviewing and reconciling the gift card log and ensuring the Tax ID number of gift card recipients remains confidential.
Budget Manager
Responsible for developing and overseeing gift card controls in the department. Gift cards must be safeguarded at all times. Provides list of gift card recipients, including name, address, and tax identification number to Accounts Payable for Form 1099 reporting.
P-Card Holder
P-Card holders are responsible for following the University’s P-Card Policy. All gift card purchases must adhere to both this policy and the P-Card policy. Gift card purchases must be approved by the Controller’s Office and charged to unrestricted funds.