Is that holiday gift taxable? Here’s how to tell

December 21, 2011 by Christian Schappel

Cash gifts – you know they’re taxable. But what about non-cash holiday gifts? The answer: It depends. 

If they’re large, with a value in excess of $100, the employer must report the value of the gift on the recipient’s W-2 and withhold the appropriate amount of taxes.

Smaller gifts like flowers, fruit, books, snacks and the occasional tickets to entertainment events are considered de minimus fringe benefits by the IRS and are not subject to taxation.

The IRS also says it does not consider holiday parties to be a form of taxable compensation, as long as they are “reasonable.”

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