The IRS reminds employers that last year’s Tax Cuts and Jobs Act made changes to several programs that can affect an employer’s bottom line and its employees’ deductions. This includes employee achievement awards.
Here are some facts about these changes:
Under previous law:
Employers could deduct the cost of certain employee achievement awards. Deductible awards were excludible from employee income.
Under the Tax Cuts and Jobs Act:
There is now a prohibition on cash, gift cards and other non-tangible personal property as employee achievement awards.
Special rules allow an employee to exclude certain achievement awards from their wages if the awards are tangible personal property.
The new law clarifies that tangible personal property doesn’t include cash, cash equivalents, gift cards, gift coupons, certain gift certificates, tickets to theater or sporting events, vacations, meals, lodging, stocks, bonds, securities, and other similar items.
More information: Tax Cuts and Jobs Act: A Comparison for businesses Employer Update
Share this tip on social media — #IRSTaxTip: Tax reform law makes changes to employee achievement award rules https://go.usa.gov/xPSvY
Retirees should do a Paycheck Checkup to make sure they are paying enough tax during the year by using the Withholding Calculator, available on IRS.gov. The Tax Cuts and Jobs Act, enacted in December 2017, changed the way tax is calculated for most taxpayers, including retirees. Because of this law change, retirees who receive a […]