Tax Reporting of Awards, Gifts and Prizes to Employees Policy

Managers and employees are responsible for adherence to company policy. Failure to do so may result in disciplinary action up to and including termination.

 

All awards, gifts and prizes that are cash or cash equivalents must be included in an employee's taxable income and subject to certain tax withholdings, regardless of dollar amount. Cash equivalents include, but are not limited to:

 

For awards, gifts or prizes that are not cash or cash equivalents, each award, gift or prize should be evaluated separately. If an award, gift or prize has a fair market value more than $100, the entire fair market value is reported as taxable income and subject to certain withholdings, not just the value more than $100. However, the total value of prizes given simultaneously or within the same incentive/compensation program during the calendar year should be aggregated for the purposes of tax reporting.

 

According to federal Internal Revenue Services (IRS) regulations, the value of any award, gift or prize that an employer gives to an employee must be included in that employee's taxable income and subject to certain tax withholdings.

Exception: IRS guidelines make an exception for awards, gifts and prizes with a monetary value so minimal that accounting for them by an employer would be unreasonable or administratively impracticable (in IRS jargon - "de minimis"). This exception does not apply to cash and cash equivalents. Awards, gifts, and prizes given to an employee are generally considered as "de minimis" if the fair market value is $100 or less. However, awards, gifts or prizes from comprehensive programs such as The Hartford's Rewards and Recognition Program ("Globoforce") do not qualify as "de minimis."

 

All US employees of The Hartford.

 

 

 

 

If you have additional questions, please contact Employee Relations by submitting a request via the following link: Contact Employee Relations.


Revised: 12/31/2017