Page 359 - Small Business IRS Training Guides

Tax Cuts and Jobs Act

Provision 13310

Employee Achievement Awards

Overview

Introduction

Prizes and awards given to employees are generally both taxable to the employee and deductible by the employer.
However, certain employee achievement awards are excludable from an employee’s income but still deductible by
the employer.

IRC 74(c) provides an exception to the general income inclusion rule and applies only to items of tangible personal

property given to employees for length-of-service or safety achievement that do not exceed $400 per employee per year
for nonqualified plan awards and $1,600 per employee per year for qualified plan awards. Qualified plan awards are those

that are granted as part of an established written plan that does not discriminate in favor of the highly compensated and
are awarded as part of a "meaningful" presentation.

This lesson will discuss the expanded definition of tangible personal property created by the new tax law for the purposes

of employee achievement awards.

73233-102 13310-1 Tax Cuts and Jobs Act