Are recognition awards taxable?
In 1986, the U.S. Congress and President reinforced the importance of employee recognition by making Service and Safety Awards tax deductible for sponsoring companies and excludable from the incomes of individual employees. However, there are some rules. The award must be a part of a “Qualified Plan.”; an item of tangible personal property awarded as part of a meaningful presentation and average under $400 with an upper limit of $1,600. Awards over $1,600 are taxable to the recipient only for the amount above $1,600. Your Terryberry consultant can provide details, but you should also consult your tax advisor.
