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EMPLOYEE RECOGNITION

Duke Tax Accounting Duke Tax Accounting is the primary resource for tax matters for Duke University and Duke University Health System.

Recognition Approval, Funding and Payment Guidelines

1. Specific selection criteria for recognition awards shall be established and approved by the entity/school/department administration. Proposed recognition awards must be reviewed and approved in advance of purchase.

2. Funding of award/gift expenses is subject to Duke, state and federal guidelines applicable to accounting, budgeting, payroll and purchasing policies.

3. All gifts/awards must be approved, in advance of purchase, by a Dean, Director or Department Head.

4. The procurement card provides an efficient method for making allowable business related purchases. Purchases are charged directly to the department's designated cost object, and Duke issues one monthly payment for all procurement card purchases.

5. All gifts/awards purchased with personal funds may be reimbursed using the Miscellaneous Reimbursement Form following the Duke general accounting procedure number 200.021.

6. Monetary awards—such as cash, gift cards, and gift certificates—received by staff members are taxable income to the recipient, regardless of the dollar value.¹ In addition, fringe benefit rates will be assessed to the associated cost. Such purchases must be charged to 691800.

7. Gifts and awards of tangible personal property are generally considered non-taxable to the recipient unless the approximate Fair Market Value (FMV) ² is clearly $100.00 or greater or the items are provided frequently.³ Note that the value of tangible personal property, by the nature of such items, may be difficult to estimate. These items must be charged to 693200.

8. For taxable gifts and awards, as defined in (6) and (7) above, the responsible department must provide the names and social security number or Duke unique identification number of each recipient to facilitate tax processing.

9. Sponsored Project (Grant) funds may not be used for general recognition of staff members. This should not be confused with "incentives" for individuals participating in Grant funded trials or studies. Incentives to Duke staff members participating in Grant funded trials or studies are allowable costs to Grants with Grantor approval. Gifts/awards purchased using sponsored funds will be subject to the documentation requirements detailed in (8) above regardless of fair market value.

1. The IRS considers gift certificates and savings bonds to be cash equivalents and therefore includable in income, even if the property or service acquired with the gift certificate would normally be excludable.

2. The Fair Market Value (FMV) of tangible personal property is the amount a staff member would have to pay a third party in an arm's-length transaction to buy that property. This amount will be determined on the basis of all the facts and circumstances. Generally the cost of the item will determine its FMV, however, discounts for bulk purchases, for example, may not be taken into account in determining FMV.

3. Gifts or awards of tangible personal property for length of service or retirement are not taxable to recipients if the value is less than $400. These items may not be made within the staff member's first five years of service nor more frequently than every five years.

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