Awards, Gifts and Prizes
Op8.11 Awards, Gifts and Prizes
Please reference the gift policy chart for clarification. This chart is only a summary and is not meant to supersede the awards, gifts and prizes policy, fiscal responsibility policy or any other written university policy. (You need Adobe Reader to view and print this document.)
Awards, gifts and prizes are allowed to the extent the expense is reasonable and necessary to carry out the mission of the university. They may not be lavish or extravagant, and must comply with any funding source restrictions. Proper classification of payments is necessary to differentiate between those considered scholarships, which may be non-taxable, and those that are awards, gifts or prizes, which may be taxable. Parking passes are not to be given to students, faculty or staff as prizes, awards or gifts.
A gift reporting form with all approval signatures must accompany a payment request form or requisition to make a purchase or reimbursement using either university or foundation funds. The gift reporting form must also accompany any travel reimbursements for individuals seeking reimbursement for items purchased as a gift. This form with the names of individuals receiving an award/gift/prize must be forwarded to financial services by the 10th of the month following the month in which the individual receives the award/gift/prize.
For those situations in which a gift reporting form is not required, it is still necessary to provide the specific business purpose in the purchasing documents (payment request form, requisition, bookstore budget transfer form, etc.) as well as how the purchase benefits the university.
- The gift reporting form and instructions can be accessed on the financial services website.
- A mass gift report form and instructions is available to use for approval for multiple gifts/prizes/awards at one time.
Gift certificate/gift card purchases cannot be charged on the P-Card.
Awards: Cash or noncash items given for meritorious performance, productivity or other reasons connected with employment; for nonemployees, given in recognition of an accomplishment, achievement or activity that does not require the performance of a service, as well as for other valid business reasons.
Gifts: Cash or noncash items given to express appreciation or gratitude; not related to job performance and no negotiation conducted in advance. Gifts should be of nominal value and, ideally, bear the university's licensed logo or be Missouri State University themed.
Prizes: Cash or noncash items received as a result of a game of chance, drawing or contests of skill, either with or without the purchase of a chance or ticket.
Chance or Ticket: Something of value that is given to participate in a game or contest.
Awards, gifts and prizes procedures
Awards to employees
Awards to employees limited to established university-wide programs. Exceptions may be granted as stated in the fiscal responsibility policy.
Infrequent noncash awards of nominal value given to employees are not reported as taxable compensation. Cash and/or gift certificates/gift cards are always reported as taxable to the employee on Form W-2, regardless of the value.
Since the award may need to be recorded in the payroll system, the department presenting the award must notify financial services by submitting a gift reporting form, even if the award qualifies for one of the exceptions below. Gift reporting forms must be submitted for all awards to employees, regardless of the value of the award.
Certain achievement awards of tangible property may not be reported as taxable to an employee if they are awarded in a meaningful presentation that emphasizes the purpose of the award. The value of the award funded by the university may not exceed $400 per year per employee. These awards and additional criteria are as follows:
- A "length of service" award is not reported as taxable if it is not granted to an employee more frequently than every 5 years. A retirement gift generally will not be reported as taxable if given as a "length of service" award and does not exceed $400 per year per employee.
- A "safety award" is not reported as taxable so long as the award does not exceed $400 per year per
employee and both of the following conditions are met:
- It is provided to no more than 10% of eligible employees; and,
- Managers, administrators, clerical, and professional staff are ineligible for the award.
Awards to college faculty and staff
Colleges may award up to $2,500 annually to faculty/staff awards according to college policies and procedures. The $2,500 may provide a number of small awards, one large award, something in between or no awards. All awards must be funded with private donations through the foundation. A personnel action form must be submitted indicating the award amount.
Awards to nonemployees
Awards may be given in recognition of past accomplishments or activities as well as for other valid business reasons. Granting/awarding financial aid is not considered an award for purposes of this policy. Awards to students that are related to academic performance are considered financial aid and, as such, are not subject to the provisions of this policy.
Awards given to nonemployees are generally considered reportable as taxable income if cumulative gifts in a calendar year equal or exceed $600. The university will file a Form 1099-MISC to report the awards when the value of cash and the fair market value of noncash awards to an individual total $600 or more in a calendar year. Noncash awards to nonemployees that have little intrinsic value, such as medals, trophies, and plaques are not reportable. A gift reporting form must be completed for all awards of cash and gift certificates/gift cards, as well as for all awards of tangible property exceeding $75 in value. These are considered nontaxable if infrequent and of nominal value. The social security number is not required for nonemployees if awards are less than $600.
Gifts to employees
In limited circumstances, flowers or other gifts to employees are allowed. Please refer to the fiscal responsibility policy for appropriate purchases with university funds. Gifts, including those for birthdays, weddings, showers and other personal events, are not allowable expenditures of university funds. (At their discretion, co-workers may contribute personal funds for this purpose). Cash and/or gift certificates/gift cards are always reported as taxable to the employee on Form W-2, regardless of the value. Infrequent noncash gifts of nominal value given to employees are not reported as taxable compensation. A gift reporting form must be completed for all gifts given to employees.
Gifts to nonemployees
Noncash gifts may be presented as a token of appreciation to a donor, dignitary, guest, volunteer, visitor (or in certain circumstances, customer or client) when a valid and documented business purpose exists such as to recognize contributions to the university or to honor a distinguished visitor. Examples are token items given to donors by the Alumni Association or mugs given to conference attendees. Gifts (cash or non-cash) in excess of $600 will be reported on Form 1099-MISC and will be taxable by the IRS. Gifts in excess of $75 require completion of the gift reporting form. These are considered nontaxable if infrequent and of nominal value.
Cash and noncash prizes may be awarded to individuals for participation in games of chance or contests of skill. Games of chance include raffles and door prize events. Raffles and games of chance must be approved by financial services. Examples of contests of skill include an essay-writing contest and basketball shooting contest. In certain instances, the purchase of a chance or ticket may be required.
Prizes may only be awarded where benefits are expected to accrue to the university, such as a fundraising event. No prize may be awarded to a university employee except where the individual's employment is incidental to the basis in which the prize is awarded. For example, a university employee would be eligible to win a door prize awarded at random or an essay-writing contest.
The department or organization sponsoring the contest must maintain detailed records of all receipts and expenditures associated with the contest, including the winner's name, address, social security number, dollar amount spent for a chance or ticket (if any) and the dollar value of the prize won. All contests associated with games of chance or skill must be conducted in accordance with Missouri state law.
Federal law requires the university to report prize winnings to the IRS and to the recipient on a calendar year basis. Federal regulations also require that a specific percentage of the winnings must be withheld under certain conditions. A gift reporting form should be filled out regardless of value.
- Prizes that involve the purchase of a chance or ticket: Noncash winnings are reported at their fair market value. Prizes of $600 or more are reported on a Form W-2G if the winnings are at least 300 times the amount of the chance or ticket.
- Prizes that do not involve the purchase of a chance or ticket: Prizes of $600 or more are reported on a Form 1099-MISC if the recipient is not an employee. Cash and/or gift certificates/gift cards are always reported as taxable to the employee on Form W-2. Infrequent noncash prizes of nominal value given to employees are not reported as taxable compensation.
Awards, gifts and prizes to nonresident aliens
Prizes and awards to nonresident aliens are generally subject to 30% withholding and reported on an IRS Form 1042-S. You must contact financial services before processing cash or noncash awards, gifts and prizes to persons who are not U.S. citizens or Legal Permanent Residents. A gift reporting form should be filled out regardless of value.
Missouri State University officials understand that in certain instances it is acceptable to recognize a person by giving a gift which is intended to show the university’s appreciation for the individual. It is incumbent on the university’s officials to use good judgment in making such gifts, both in number and cost. In addition, it is imperative that good record-keeping procedures are in place and that the approval process is followed regarding any expenditures surrounding such gifts.
The following individuals and entities have the responsibility to document the giving of awards, gifts, and prizes:
- Faculty and Staff: Persons authorized to give an award, gift, or prize must complete a gift reporting
form and submit the form with the payment request/travel expense report indicating
the purchase of the award, gift, or prize. The form must be completed at the time
of the transaction and forwarded immediately for appropriate signatures until it reaches
the vice president’s office. The form must be completed in its entirety and approved
by all appropriate persons. See gift reporting form instructions for appropriate approval
methods. The form must be complete with the following information:
- Information of person receiving the gift
- SSN are only required when the expected value of the gift/gifts to a nonemployee are expected to exceed $600 in the calendar year
- Employment status
- Student status (current student or not)
- Description of the gift
- University approval
- Authorized FOAP used to purchase the gift
- Person presenting gift
- Department head
- Dean approval (when appropriate)
- Principal investigator (for grants only)
- Vice president approval
- Information of person receiving the gift
- Department and/or organization: The department or organization sponsoring an event should submit the appropriate documentation regarding the list maintained at the event that details the winners’ information. If the department/organization awards or provides gifts to individuals, gift reporting forms should be completed and submitted to financial services for reporting purposes. All gift reporting forms should be maintained for each event and submitted directly to financial services immediately upon the completion of the event’s activities.
- Department head, both academic and non-academic: Must approve the appropriateness of using either university or foundation monies to purchase a gift to express the university’s appreciation. The authorized FOAP must be indicated on the gift reporting forms. Departmental support is requested.
- Vice president: Required to provide financial services with required approval.