Is This Taxable?

safety

Not being an accountant or a tax lawyer I’m having a battle with payroll over a safety incentive. We gave all of our ee’s movie tickets along with refreshment tickets worth $21 per ee. I didn’t think they were taxable but corporate payroll is telling me they are. I have read publication 15-B from the IRS but now I’m more confused than ever. Any guidance would be appreciated.

LivindonSouth

With the exception of that which falls under de minimis definitions, if it can be used as cash or exchanged for something of value, it is taxable. I agree that both the theatre ticket and popcorn voucher are taxable.

And, I'm surprised you are rewarding people for doing what they are expected to do anyway, work safely.

safety

I expected someone to comment on a safety incentive. I know the pros and cons of this and have struggled with it for five years. This is a GM decision and he won’t listen to me on the issue. We give out an incentive every 75 days if we have no OSHA recording event.

So far this year our TICR is at 4.85 and coming down as each month goes by. As you know some of OSHA’s regs are ridiculous and that is why we had two simple first aid cases turn into recording events. I took two ee’s to the doc earlier in the year for separate events. Both times no treatment was given but samples of prescription medications were handed out thus turning them into seperate tic marks on the 300 log.

Thanks for answering my question!

System

The most cumbersome thing is the method you use to tax things like tickets. The same thing happened here with savings bonds.

A $200 savings bond costs $100 dollars. In order to tax it, we had to give the ee a $100 bonus (making it taxable income), then deduct $100 to go out and buy the savings bond. Now the savings bond can lay around for years and eventually be worth $200; then taxed again.