De Minimus Employee Incentive (noncash or gift card)

HCTVF · ‎January 18, 2020

I am not sure if I need to post this in Employee and Payroll category or here. I will repost to the appropriate category if need be.

We purchased two tickets for our two employees last summer to go see Garth Brooks. We had only two employees at that time so there was not any employee excluded. Each ticket was less than $100 and could not be used as cash like a gift card. Under the De Minimus Fringe Benefits - IRS page the expense we paid out would not be taxable to the employee because it is less than $100 each, but is it deductible for the business and what account would I use for it. I have it currently under Payroll Expense-Employee Gift, which I created. Is there a place in quickbooks that is already set up for this kind of expense? Also, the IRS made a reference to frequency so I will mention this is the only employee gift that was provided for 2019.

Rustler · ‎January 20, 2020

if you are not going to treat the gift as employee income, then do not use a payroll expense account, it will muddy things in the event of an audit, buy the tickets and use gift expense

View solution in original post

Rustler · ‎January 18, 2020

from this page, what page were you referencing
https://www.irs.gov/pub/irs-pdf/p5137.pdf
chapter 4, page 14

The law does not specify a value threshold for benefits to qualify as de minimis. The
determination will always depend on facts and circumstances. The IRS has given
advice at least once, in 2001, that a benefit valued at $100 did not qualify as de minimis.
However, this technical advice addresses a specific situation and cannot be relied upon

gift expense will to post the expense to

HCTVF · ‎January 20, 2020

Thank you @Rustler for your response. I will preface that I am not an accountant or bookkeeper by profession. I found the $100 reference from this IRS webpage discussing De Minimus Fringe Benefits Thank you for the link to the guide.

Your last line of your response was "gift expense will to post the expense to" which did not complete for some reason. In your opinion and experience is my current accounting I am using accurate? If not, what should I be doing differently. Thank you again for your response.

Tracey

Rustler · ‎January 20, 2020

if you are not going to treat the gift as employee income, then do not use a payroll expense account, it will muddy things in the event of an audit, buy the tickets and use gift expense

HCTVF · ‎January 21, 2020

@Rustler Thank you. I will do so! I appreciate you!

McRitchie Swift · ‎January 30, 2024

I'm curious then how you categorized this expense and if you considered it a FB after all? If you changed the expense from PR to something else, what was the something else? And how does it flow through as a FB to the employee?

Topics

Training

Community

Resources

De Minimus Employee Incentive (noncash or gift card)