The changes made to the U.S. tax code in December 2017 by Public Law No: 115-97 had a minimal impact on the rules governing companies' management of employee achievement rewards programs. In the new law, Congress clarified the definition of the term 'tangible personal property' by outlining the following. "…The term ‘tangible personal property’ shall not include- cash, cash equivalents, gift cards, gift coupons, or gift certificates (other than arrangements conferring only the right to select and receive tangible personal property from a limited array of such items pre-selected or pre-approved by the employer), or vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, other securities, and other similar items.”
In short, recognition gifts that are encompassed in the above definition of 'tangible personal property' will remain separate from employee compensation eligible for taxation. Further, the cost of such programs will also remain as an available deduction to participating employers.
Tax and Legal Advice Disclaimer
Awardco does not provide tax, legal, or accounting advice. The material in this document has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. Sponsors, owners, and those responsible for creating and managing recognition and incentive programs should consult their own appropriate advisors.
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