Gifts, Prizes, and Awards Policy

Purpose: In some instances, gifts, prizes, awards, and promotional items may be purchased with a valid business purpose. Regardless of the recipient, State of Kansas Ethics Policies, IRS 1099 reporting implications, grant award agreements, and other applicable rules and regulations must be followed.

Applies to: This policy applies to all Pittsburg State University (PSU) departments.

Policy:

Allowability and tax reporting for gifts, prizes, and awards are dependent upon the employment classification of the recipient. Per this policy, taxability and IRS reporting requirements are as follows:

 A. Gifts

1. PSU Employees
   1. Cash/Cash Equivalent – Not allowed
   2. Commodities/Goods – Allowed with PSU Foundation Funds and valid business purposes; will be reported as a taxable fringe benefit if $40 or greater
   3. Entertainment – Not allowed
2. PSU Student Employee
   1. Cash/Cash Equivalent – Not allowed
   2. Commodities/Goods – Allowed with PSU Foundation Funds and valid business purpose; 1099 Reportable $100 or greater
   3. Entertainment – Not allowed
3. Non-PSU Employee (Students, Community Members, Guests, etc.)
   1. Cash/Cash Equivalent – 1099 Reportable
   2. Commodities/Goods – 1099 Reportable if $100 or greater
   3. Entertainment – 1099 Reportable if $100 or greater

B. Prizes

1. PSU Employees
   1. Cash/Cash Equivalent – Allowed if random drawing or contest; will be reported as a taxable fringe benefit
   2. Commodities/Goods – Allowed if random drawing or contest; will be reported as a taxable fringe if $40 or greater
   3. Entertainment – Allowed if random drawing or contest; will be reported as a taxable fringe if $40 or greater
2. PSU Student Employee
   1. Cash/Cash Equivalent – Allowed if random drawing or contest.  1099 Reportable
   2. Commodities/Goods – Allowed if random drawing or contest; 1099 Reportable if $100 or greater
   3. Entertainment – Allowed if random drawing or contest; 1099 Reportable if $100 or greater
3. Non-PSU Employee (Students, Community Members, Guests, etc.)
   1. Cash/Cash Equivalent – 1099 Reportable
   2. Commodities/Goods – 1099 Reportable if $100 or greater
   3. Entertainment – 1099 Reportable if $100 or greater

C. Awards

1. PSU Employees
   1. Cash/Cash Equivalent – Taxable Fringe
   2. Commodities/Goods – Taxable Fringe if $40 or greater
   3. Entertainment – Not allowed
2. PSU Student Employee
   1. Cash/Cash Equivalent – 1099 Reportable
   2. Commodities/Goods – 1099 Reportable if $100 or greater
   3. Entertainment – Not allowed
3. Non-PSU Employee (Students, Community Members, Guests, etc.)
   1. Cash/Cash Equivalent – 1099 Reportable
   2. Commodities/Goods – 1099 Reportable if $100 or greater
   3. Entertainment – 1099 Reportable if $100 or greater

D. Gift Cards

Per IRS regulations, gift cards are a cash equivalent and follow the same rules as if cash was given and is either a fringe benefit or 1099 reportable transaction regardless of the dollar value.  Gift cards may not be purchased using a procurement card.

Reporting

If a transaction is deemed to be 1099 reportable, a W-9 or W-8BEN must be obtained from the recipient of the gift, prize, or award. If a transaction is deemed to be a potential fringe benefit, the information will be submitted to Human Resources for evaluation and assessment of any benefit. 

Compliance

All departments and organizations are responsible for complying with this policy. Failure to comply with these policies may result in:

1. Audit findings or compliance violations.
2. Incorrect tax reporting.
3. Repayment by the purchaser of the gift, prize, or award, or denial of payment in the case of a reimbursement.