Employee Gift Policy Updated Posted October 13, 2023

Changed: 

Non-taxable limit for other occasional gifts (tangible)

Occasional employee morale gifts are used for occasions unrelated to performance recognition, such as for holidays or to commemorate a department event. During the pandemic, the non-taxable limit for tangible gifts was increased from $50 to $100. This change is now permanent. If the tangible gift exceeds the threshold of $100, the entire amount becomes taxable.

For example:

• An employee receives a Stanford coffee mug as an onboarding gift. The value of the gift is $20. The value of this gift alone is not taxable to the employee.
• An employee receives a Stanford sweater and backpack as an end of year holiday gift. The value of the two gifts is $110. The total taxable amount is $110.

Note: Sympathy or bereavement gifts are considered a separate type of occasional gift and their value does not get aggregated into the total.

• For example: An employee has a loss in the family and the department sends a sympathy bouquet valued at $50. This employee also receives a sweater and mug as a holiday gift valued at $60. These gift values are not aggregated together, so there is no tax reporting for the employee.

Clarified:

Taxability of any gift cards, gift certificates, and cash gifts for both occasional and service/milestone gifts

To align with IRS guidelines, it was clarified that all gift cards are taxable for the full value when provided as gifts, regardless if they are under taxable thresholds for tangible gifts because they are considered cash equivalent.

For example:

• An employee receives a $50 Visa gift card as a gift from Stanford as a thank you for completing a big project. The $50 gift card is considered taxable.
• An employee receives a $50 AMEX gift card to commemorate their fifth anniversary at Stanford. The $50 gift card is considered taxable.
• An employee receives a $125 Amazon gift card as an end of year holiday gift. The $125 gift card is considered taxable.

Not changed: 

Non-taxable limit for service milestone/retirement gifts

For all types of gifts, departments are strongly encouraged to consider purchases of Stanford-branded merchandise or tangible items as opposed to gift cards. Gift cards have additional tax considerations.

The non-taxable limit for tangible gifts provided to acknowledge years of service is $400 a year, and the amount should be commensurate with years of service. For this type of gift, only the amount over the taxable limit is taxable.

Retirement gifts may be provided to employees by departments and are similar to service milestone gifts in that the value should be commensurate with years of service. Tangible gift values over the $400 threshold will be taxable at the value over the threshold (amount above $400). 

For example:

• An employee receives a watch valued at $450 to commemorate their 30th year at Stanford. The taxable amount is $50 because the non-taxable limit for that type of gift is $400.
• An employee receives a $450 gift card to a local restaurant to commemorate their 30th year at Stanford. The taxable amount is $450, because gift cards are taxable for the full amount.

Not changed:

Gift cards provided for business meals or morale are not taxable to the recipient

When purchasing gift cards/certificates for a business meal or employee morale event meal, regardless of purchase method, use one of the appropriate expenditure types:

• 52355 Food (for business meals)
• 52240 Employee Morale

The meal gift card is not taxable if there is a business purpose for the meal gift card or if the meal gift card is part of an employee morale event and the remote employee is participating virtually in the event.

For example: 

• A team is having an on-site business retreat to discuss team priorities. Lunch will be provided. Several employees cannot attend in person and will participate virtually so the team made the decision to send a meal gift card to cover their lunch. Therefore, the gift card is non-taxable.