Rewarding Staff?

Richard D. Locke is a certified public accountant with over forty years of experience. His firm, Locke & Associates, P.C., is a full service accounting firm which specializes in taxation and nonprofit services. The firm has six certified public accountants servicing approximately one thousand clients in the United States and thirty countries. You can reach Richard D. Locke, CPA at 918-488-0880.

Question:  What are acceptable team-building and rewarding events that our church can sponsor?  For example, can we reward staff or team members with tickets to a sporting event?

Answer:  Generally, small fringe benefits are not taxable.  To have to account for these would be unreasonable and administratively impractical.  The IRS regulations state that the gift should be $25 or under per person.  The IRS has stated that the following are non-taxable benefits:

1. Flowers, fruit, or books – provided to employees during times of family crises;
2. Birthday or holiday gifts (not cash) with a low market value;
3. Occasional parties, group meals, or picnics;
4. Coffee, donuts, or soft drinks;

Infrequent theater or sporting events tickets as a reward for staff.  This would not include $250 tickets to the World Series or any other high dollar sporting event.

To be safe, keep it near the $25 figure allowed.

Larger items than those listed above, as well as all cash and cash equivalents (gift certificates) should always be included in the employee’s taxable income.