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Gift Cards

 
Under Internal Revenue Code (IRC) 132 a gift card, gift certificate or a prepaid Visa/MC is considered a cash or cash equivalent fringe benefit. This type of fringe benefit is additional compensation and taxable to an employee, non-employee, student, or research participant. If more than one gift card is purchased at a time a gift card log must be kept up to date and on file in the department. For more information, see Gift Card Log Procedures section below. Once all the gift cards have been distributed, the gift card log must be attached to the original purchase transaction. If you have any questions, call 435-797-0589.

Ways to Pay for the Gift Cards:

• P-Card

A gift card may be purchased with a P-Card. The P-Card transaction must include the receipt for the gift card(s). Please see P-Card Procedures for more information.

EZ-Buy Direct Pay Form (Award/Prize/Gift Card)

The check will need to be picked up at the Cashier's Office in the TSC room 248 for the department to purchase the gift card.


Click on any category below to access information for each type of gift card and the requirements needed to purchase:

Gift Cards to Students


The University complies with the IRS Regulations by reporting payments that total $600 or more over the calendar year on the 1099-MISC Form. The Internal Revenue Service considers gift cards to be non-compensatory taxable income to the student. These payments may be considered income when determining a student's financial aid package and have an impact on other need-based financial aid the student may receive.

 

The following information must be completed on the Taxable Gift and Award spreadsheet:

1. The name and A# of the student receiving the gift card

2. The date the gift card was given

3. Purpose of the gift card

4. Please allocate the expense to account code 714605

 

Gift Cards to USU Employees

 

Gift Cards are considered cash equivalent and taxable to the employee. There is no "minimum amount" payment that is considered tax-free if it is related to employment at USU. Applicable payroll taxes will be withheld from the employee's next paycheck.

 

The following information must be completed on the Taxable Gift and Award spreadsheet:

 

1. The name and A# of the employee being paid

2. The date the gift card was given

3. Purpose of the gift card

4. Please allocate the expense to account code 714600

 

 Gift Cards to Non-Employees/Non-Students

 

A gift card is considered a cash equivalent to a non-employee research participant. The University complies with IRS Regulations by reporting any form of non-employee compensation that totals $600 or more over a calendar year on 1099-MISC Form.

 

The following information must be completed on the Taxable Gift and Award spreadsheet:

1. The name of the recipient (and A# if previously a student or employee)

2. The date the gift card was given

3. Purpose of the gift card

4. Please allocate the expense to account code 714600

5. A completed W-9 Form if the gift card is $600 or more

 

 Confidential Research Subjects

 

For research projects ruled confidential by the Institutional Review Board (IRB), a modified log should be maintained by the department gift card custodian. This log should contain the following:

• gift card purchase date

• ID number of each card

• amount of each card

• signature of the PI next to cards received

• signature of Gift Card Custodian

• date received by the PI

 IRB number of the research project


This is an example of a cash/gift card log that may be used: Research Subject Cash/Gift Card Log.


Once all gift cards are distributed to the PI, the completed log including the signature of the custodian must be attached to the P-Card or EZ-Buy transaction.


In addition, the PI must keep a confidential log containing the following information:

• ID number of each card

• amount of each card

• signature of the recipient

• signature of PI giving the gift card

• date received by the recipient

 IRB number of the research project


This confidential log would be kept in the PI's files subject to random audit.


The "Participant Population" form from the IRB system, (PROTIS) should be attached to the P-Card transaction documenting whether the recipients will receive $600 or more during the year. If any individual is awarded $600 or more, it is required that a W-9 be submitted to the Controller's Office for tax reporting purposes. No information regarding the nature of the project should be attached.


 Gift Card Log Procedures

 

An employee in your department should serve as a Gift Card Custodian. They are responsible for securing the gift cards and maintaining a gift card log. (See the Confidential Research Subjects section for exceptions to this requirement.)


The gift card log should contain at a minimum:

• gift card purchase date

• ID number of each card

• amount of each card

• signature of recipient

• signature of Gift Card Custodian

• date received

 reason the gift card was given


Business Services should periodically reconcile the gift card log. Once all gift cards are distributed a final reconciliation must be completed before attaching the log to the P-Card or EZ-Buy transaction. The final reconciliation should include the signature of the person who completed the reconciliation.


A reconcilliation, in this instance, means: to assure all gift cards that were purchased are accounted for on the log and are being used/were used for the appropriate University-approved purposes.