You might have already heard that giving out great gifts to employees is a great thing to do. But,before you go out and giving out all of the cool gifts for the holidays,you will want to know the guidelines surrounding employee gift giving. Any gift you give to an employee from your business is going to be subject to tax,so you will want to know just what types of things are considered as de minimis items.
If you plan on giving something you made yourself to your employee then you should probably think twice about doing so because it is not really a good idea. Most of the de minimis items that you can give to employees are those that are tax exempt. You can give out such things as a t-shirt with your business logo printed on it,or a small personal item such as a bottle of wine with your name and business on it. The problem with these gifts is that they cost very little to produce and are extremely hard for the employer to determine if they qualify for a tax credit. So,if you think that you will qualify for a tax credit for a de minimis gift then it might be best to wait until after Christmas to send them out.
There are many other types of gifts that are exempt from tax,such as those that are given to a company as an incentive. This will vary depending on the specific company,so make sure that you do the proper research on your particular company before you send out an employee gift. Also,as you are sending out any type of gift it is always a good idea to check with your state’s office of administrative law to see what they have to say about employee gift giving restrictions. In many cases you can have some great things for your employees while still getting into a good tax situation. So,if you want to save money on taxes,consider giving out some great gifts to your employees this year.