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How to Process Prizes and Awards for Employees

  1. Verify vendor identification number or have Vendor setup in FAMIS
  2. Complete all sections of the Individual Reimbursement Form
  3. State in doc notes why the prize or award is being presented to this employee.
  4. All gifts in excess of $100 and all gift certificates in any amount requires a "Request for Tax Withholding" form to be submitted with the Individual Reimbursement form.
  5. Submit documentation to FMO Accounts Payable by FTP or send to MS 6000.
  6. Cash awards to employees for achievement must be submitted through Payroll Services

Disbursement Manual Guidelines

Gifts for employees must adhere to the following guidelines.

Gifts

Accounts that are NOT funded by mandatory student fees, contracts or grants, Available University Fund, state appropriations or restricted by donors may pay for a card and/or flowers, plant, basket, or appropriate item for an employee in celebration of a birth or adoption of a child, illness, or special honor. This must comply with http://rules-saps.tamu.edu/PDFs/31.01.99.M0.01.pdf

However, any employee gift in excess of $100 per year constitutes additional taxable compensation to the recipient. Gifts in excess of $100 and gift certificates for any amount require a "Request for Tax Withholding" form. This form can be found on the Payroll Services website.

When processing the payment for a gift in any dollar amount the employee’s name and UIN number or social security number must be provided and the employee must be set up in FAMIS. Gifts and awards for employees are coded 5240. Do not use 6335.

Retirement gifts, except cash or a gift certificate, may be excluded from income if the dollar amount of the gift relates to the retiree’s length of service. Documentation is to be provided describing the relationship between the retiree’s length of service and value of the gift. If the retirement gift is cash or a gift certificate, it is taxable to the employee. Cash gifts must be processed through Payroll. A gift certificate given as a retirement gift is processed through Accounts Payable and a "Request for Tax Withholding" form is required. Retirement gifts may be purchased on any institutional account.

Gifts for employees may be purchased on the Payment Card and the recipient information listed above must be entered into the reallocation software by the departmental user.

Achievement Awards

Awards for employees must adhere to the following guidelines:

Cash awards must go through Payroll Services. The "Request for Compensation for Award to Faculty or Staff" form must be filled out and submitted to Payroll.

State funds may not be used to pay cash awards.

A state agency may expend appropriated or institutional funds to give service achievement awards to its employees and officers at periodic intervals under rules adopted by the agency. These awards in excess of $100 per year constitute additional compensation to the recipient and require completing a "Request for Tax Withholding on Non-Salary Compensation Items" form. Awards for length of service or safety are not taxable up to $400.

There are two limitations on a state agency's authority to give employee achievement awards purchased with state funds:

  1. The awards must be given to employees and officers who are still employed by the state.
  2. Can purchase any type of award that the agency feels is appropriate, provided the cost of the award is $100 or less per employee or officer.

Gifts and awards for employees are coded 5240. Do not use 6335.

Contact the IR Auditor at fmo-ir@tamu.edu or (979) 845-8774 for additional guidance on this issue and related tax implications.

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