Gifts, Prizes, and Awards Policy

The University at Buffalo (UB, university) supports the practice of recognizing community members, employees, and students for their merits and contributions in meaningful ways through the use of gifts, prizes, and awards. Such items may not be lavish or extravagant, and must comply with funding source restrictions outlined in the Gifts, Prizes and Awards Funding Chart (Chart).  Policy objectives strive to achieve the following:

• The university is in compliance with Internal Revenue Service (IRS) tax regulations
• Gifts, prizes and awards are reasonable and support the university’s mission of teaching, research, and community outreach
• University funds are used with a clear business purpose
  

State, UB Foundation, and Research Foundation (RF) funds may not be used to purchase:

• Gifts, prizes, or awards where the distribution of that item benefits a charitable organization
• Alcohol intended to be used as a gift, prize, or award

The university does not allow cash or cash equivalent to be given as a gift, prize, or award to an employee. Compensation in addition to basic annual salary must meet the requirements for supplemental pay, such as extra service or also receives. Tangible gifts, prizes, and awards are the preferred method for recognizing an employee. Tangible items must be of a de minimis value and follow the funding source requirements in the Chart.   

Awards of tangible personal property given as part of a meaningful and documented presentation, to recognize an employee on their retirement, are not taxable up to $400; amounts in excess of $400 are taxable to the employee. Additional guidance on limits and allowable funding sources are included in the Chart.   

Holiday gifts for faculty, staff, and student employees are not allowable via any funding source. Also, gifts to honor an individual for personal reasons (e.g., birthday, wedding, housewarming) may not be charged to university funds. Personal contributions among colleagues may be considered as a method of providing such gifts.

Employees who receive a gift, prize, or award resulting from performing an activity that is separate and distinct from their position at the university will be treated as nonemployees. This includes employee human subjects, donors, alumni, and volunteers.

Gifts, prizes, and awards given to nonemployees:

• Must comply with allowability requirements in the Chart
• Have a documented business purpose
• Are generally reportable as taxable income if cumulative payments in a calendar year equal or exceed $600

The university will file IRS form 1099-MISC to report the gifts, prizes, and awards when the value of cash and the fair market value of noncash awards to an individual total $600 or more in a calendar year. Noncash awards to nonemployees that have little intrinsic value, such as medals, trophies, and plaques are not reportable.

A Taxable Income Reporting Form must be completed for all awards of:

• Cash and cash equivalents regardless of dollar amount
• Tangible property with a value of $100 or greater

All gifts, prizes, and awards to a nonresident alien are subject to 30 percent tax withholding and reported on IRS form 1042-S.

The university supports recognizing the contributions of outstanding employees and non-employees through the use of gifts, prizes, and awards. This policy governs appropriate use of university funds for such expenditures and compliance with federal tax regulations.

This policy applies to all faculty, staff, and student employees who use university funds to purchase gifts, prizes, or awards to distribute on behalf of the university.

This policy does not apply to honoraria, employees compensated as extra service or also receives, moving expenses, allowances, tuition support, or items purchased using non-university funds. This policy also does not govern the acceptance of a gift from a third party.

Granting or awarding financial aid is not considered an award for the purposes of this policy. Awards to students related to academic performance are considered financial aid and are not subject to this policy.

Also Receives

Compensation provided when the work to be performed by the employee is: 1) less than one year 2) substantially different and in addition to an individual’s professional work obligation, and 3) performed during an employee’s normal work shift.

Award

Cash or noncash item given for exemplary performance or productivity and given in recognition of an accomplishment, achievement, or activity that is tied to a vital business reason.

Cash

Currency, coin, checks, credit or debit card recordings, bank notes, bullion, traveler’s checks, registered checks, and money orders.

Cash Equivalent

An instrument used in lieu of cash but in the same manner. Cash equivalents at UB include gift cards, campus cash, and reloadable debit cards (e.g., prepaid debit card for research participants).

De Minimis

Gifts, prizes, or awards so small in value that it is not reasonable or practical to account for their value. Cash and cash equivalents are never considered de minimis as defined by the IRS. For university purposes, de minimis is defined as non-cash items having a value of $100 or less and must be provided on an occasional basis.

Extra Service

Work performed by the employee must be 1) performed entirely outside the employee’s normal work day or shift, 2) substantially different from an individual’s professional work obligation as defined by the employee’s performance program, and 3) must not interfere with the employee’s regular responsibilities. Additionally, State University of New York policy states that compensation for extra service is not to exceed an amount equal to 20 percent of an employee’s base annual salary in a fiscal year beginning on July 1 or academic year beginning September 1, as appropriate.

Gift

Cash or noncash items given to express appreciation or gratitude; not related to job performance; and no negotiation conducted in advance. Gifts should be of nominal value and, ideally, bear the university’s licensed logo or be UB themed. Use of UB brand items is not a requirement unless indicated in the Chart.

Prize

Cash or noncash items received as a result of a game of chance, drawing, or contest of skill, either with or without the purchase of a chance or ticket.

Promotional item

A product branded with the university logo or slogan and distributed at little or no cost to promote the university, our identity, or a specific event or department.

Raffle

Game of chance in which a participant pays money in return for a ticket or other receipt and in which a prize is awarded on the basis of a winning number or numbers, color or colors, or symbol or symbols designated on the ticket or receipt, determined by chance as a result of a drawing from among those tickets or receipts previously sold (NYS General Municipal Law, Section 186.3-b). Raffles include Penny Social, Queen of Hearts, and Treasure Chest Raffles.

Reasonable

Costs which a prudent person would have incurred under the circumstances prevailing at the time the decision to incur the cost was made; consider how the public would view the expense if reported in the media.

• Account for all expenditures that fall within the scope of their budgetary jurisdiction.

• Account for all expenditures that fall within the scope of their budgetary jurisdiction. 
• Communicate this policy to units and departments.
• Support strong unit financial stewardship through ongoing dialog regarding reasonableness and business purpose.
• Act as a consultant to university employees seeking guidance on policy clarification and interpretation.
• Review and approve as appropriate, expenditure exceptions.

• Exercise reasonable judgment when making a decision to incur an expense on behalf of the university.
  
  • Refer to the Gifts Prizes and Awards Funding Chart, when applicable.
• Complete and submit the Taxable Income Reporting Form and the IRS W-9, W-8, and W2-G tax forms, as appropriate on behalf of the gift, prize, or award recipient.

• Review and approve as appropriate requests for the use of university funds in conjunction with this policy.
• Verify that the expense is reasonable, allowable, and allocable.
  • Consider how the public would view the expense if reported by the media.
• Accept accountability for all authorized requests.

• Investigate transactions that do not appear to be reasonable.
  
• Process transactions for payment, as appropriate.

• Conduct ongoing reviews of all university expenditures to maintain compliance with internal policies and external requirements.

Consult with your Unit Business Officer for initial clarification or interpretation questions.