Excerpt: While it is customary to think of gifts as having no tax consequences for the recipient, the Internal Revenue Code (Code) does not treat all gifts the same. Unfortunately, gifts that employers give to their employees are generally treated as supplemental wages, and thus subject to both payroll and income taxes. This means that the value of the gift must be included in the employee's W-2 at year end and included in a payroll period for purposes of income tax withholding and payroll taxes.

MORE >>