Gift Cards/Gift Certificates, How to Pay
All purchases of gift cards/gift certificates (of non-negotiable amounts) must have a valid, documented business purpose as outlined in the policies referenced below, and must comply with all University purchasing and expense procedures.
Gift card payment methods:
Purchasing card (p-card): The preferred method for purchasing gift cards is to use a University-issued Purchasing Card (p-card). The purchase must be within the p-card limits and not conflict with any contractual agreement.
- Gift cards are considered cash equivalents by the IRS. Separately submit UP 602.11 Appendix B, Reportable Gifts, Awards, & Prizes Documentation Form, to the Tax Office within two (2) weeks if:
- The recipient is an employee (regardless of amount), or
- The recipient is a non-employee and the amount is $600 or greater.
- Note that some vendors/retailers will not accept credit cards to purchase gift cards.
- Amazon eGift cards: To purchase an eGift card from Amazon, send an email to your department’s Purchasing Agent for approval. Once approved, the Purchasing Agent will send a request to the 49erMart Administrator to add the applicable permissions to your user profile. Once you are notified that this has been completed, you can purchase the eGift card on Amazon.com.
- Barnes & Nobles gift cards and tangible personal property gifts may be purchased directly from the University Bookstore with a p-card or invoiced to the department through 49erMart.
ESDPR: If the recipient is an employee or student, you may submit an Employee/Student Direct Pay Request (ESDPR). Download an ESDPR form and complete the form according to the instructions (link provided below).
- Attach UP 602.11 Appendix B, Reportable Gifts, Awards, & Prizes Documentation Form, to the ESDPR if:
- The recipient is an employee (regardless of amount), or
- The recipient is a student and the amount is $600 or greater.
- Reimbursement for purchases for others: If an individual purchases gift cards to distribute to others and requests reimbursement and the gifts meet the reportable limits, UP 602.11 Appendix B – Reportable Gifts, Awards, & Prizes Form must be submitted. If the gifts do not meet the reportable limits, a list of recipients must be sent with the ESDPR to be reimbursable to the individual tax-free, in accordance with the University’s accountable plan.
Any non-reportable gifts (see UP 602.11 Appendix A) should be tracked on UP 602.11 Appendix C, Gifts, Awards, & Prizes Log Sheet, or a similar tracking sheet unless it is unreasonable or impractical to do so.
Gift certificate payment methods:
Gift certificates should be purchased using the same payment methods above. Non-transferable gift certificates for tangible personal property are the only types of gift certificates that qualify as non-cash awards, if the gift certificate meets all of the following criteria:
- It is non-transferable,
- It is able to be used to purchase tangible personal property only, from a limited array of such items pre-selected or pre-approved by the University, and
- It is non-negotiable and non-refundable (does not allow cash back).
Gift certificates given to employees that meet the criteria listed above and are below the thresholds listed in UP 602.11 Appendix A are not reportable to the Tax Office.
Applicable University Policies:
- Review University Policy 602.11, Gifts, Awards, and Prizes, before making any gift card or gift certificate purchases.
- Refer to UP 602.11 Appendix A to determine if a gift (cumulative per person) is reportable to the Tax Office.
- Refer to University Policy 601.8, Appropriate Use of University Funds, and related standards to determine permissible fund types for these purchases.
Tax reporting requirements and Account Codes for Gift Cards and Gift Certificates by recipient type:
- Gift cards of any amount given to employees must be reported to the Tax Office for reporting on the employee’s Form W-2. In addition, the payment is subject to federal and state income taxes.
- Gift certificates for tangible personal property that meet the criteria listed above are subject to the non-cash awards and gifts limits listed in UP 602.11 Appendix A.
- Gifts to employees should be expensed to account code 950150.
- Non-employees: If combined payments to a non-employee total $600 or greater in a calendar year, the Tax Office must be notified for Form 1099-MISC reporting. Gifts to non-employees should be expensed to account code 951440.
- Foreign nationals: Prior to making a payment of any amount to a foreign national/non-U.S. resident, contact the Tax Office, as tax reporting and withholding are required.
Units may purchase advance quantities of gift certificates and cards as long as the following controls are established with respect to the quantity of gift certificates and cards purchased:
- There are appropriate controls to ensure that all pre-purchased gift certificates and cards are kept in a secure place.
- Records documenting the use of the gift certificates and cards that include the recipient’s information and the gift certificate or card number or other similar identification number are maintained.
- Units purchase only the number of gift certificates and cards expected to be awarded during a fiscal year.
- Gift certificates and cards with a value greater than the tax reportable limits specified in Policy 602.11 may not be purchased without advanced written approval from the Tax Office. Advanced approval must be requested via email or hard copy memo submitted to the Tax Office.
|Forms / Links
Contact for additional questions:
Please refer to the contacts listed on the Tax Office website.
Last revised: 5/11/2018, 7/10/2018, 9/14/18, 7/30/19, 7/01/21
Last Updated: July 1, 2021