We get this question a lot this time of the year. Frankly different clients interpret the tax code differently when it comes to the taxation of safety awards The reason is that the IRS rulings on the taxation of awards are not as clear as they should be, and because there are some incentive companies that twist these rulings to say that their award systems are not taxable.
Of course like many other debates these days the real answer is somewhere in between all the misc. rhetoric that we hear. The trick is to sort out the rhetoric and “fake news” by some award vendors and find the truth for your own circumstances.
The facts are that some safety awards are not taxable, and some are. We have clients who do not include them as taxable income and we have clients that do. Click here for a paper the legal lobbyist for the incentive industry to get an overview of the IRS rulings. With this information you will be able to determine for yourself whether you want to implement a taxable program, or one that is non taxable. Just remember not to pay too much attention to the rhetoric of some companies who would have you believe that their programs are not taxable and therefore less expensive. Actually nothing could be further from the truth. With the ridiculous pricing they use for their merchandise awards, your program may be costing you more and your employees receiving less in value for the same budget dollars.
We will be happy to show you the comparison of taxable and non taxable award systems. That will give you more information to make an educated decision on what's right for you.
For more
information on AwardSafety products or services or other white papers please
contact us at awardsafetyinfo@cox.net
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