Gifts, Prizes and Awards

  1. What is considered a gift, prize or award?
    Gifts, prizes and awards are typically gifts of cash (including gift certificates/cards) or other tangible personal property given to Kettering University faculty, staff or students in recognition of outstanding achievement in teaching, research, academic performance or other performance-related activities. In rare instances, Kettering University departments may also present gifts, prizes or awards to non-Kettering faculty, staff and students.
  1. Are gifts, prizes and awards considered taxable income to the recipient?
    In general, gifts, prizes and awards are includible in the recipient's gross income if the gift is paid for (either directly or indirectly) by Kettering University. This would include items directly charged to your budget for items purchased at the bookstore.

Gifts, prizes and awards of tangible personal property (other than cash or cash equivalents, such as gift certificates) of $75 or less are excludable from gross income. Similarly, the value of a turkey, ham or other item of merchandise of similar nominal value distributed to an employee at holiday time is not taxable. However, any gift of cash (including gift certificates/cards) is considered completely taxable, from the first dollar given.

You should note that gifts that should be reported to Accounts Payable are not just those items for which you are requesting reimbursement. Gifts, prizes and awards that must be reported as income would also include items directly charged to your budget (e.g. something purchased at the bookstore), or purchased using the p-card.

If the recipient is an employee of Kettering University, the gift, prize or award is considered supplemental wages and must be processed through our Payroll system with appropriate federal, state, local and FICA/Medicare taxes withheld. The gift, prize or award is included in the recipient’s Form W-2, Wage and Tax Statement.

For Kettering University students, if the gift, prize or award is related to services performed, it is processed as supplemental wages through Payroll with the appropriate income taxes withheld. However, if the gift, prize or award is not related to services, it is still taxable income to the recipient and must be reported on Form 1099-MISC, but it is not subject to withholding.

For non-Kettering University recipients, a gift, prize or award can be processed without tax withholding but is still considered income to the recipient (except for payments to non-resident aliens which may be subject to withholding). Such payments are reported as taxable income to the recipient using Form 1099-MISC, Miscellaneous Income. (Form 1099-MISC is only required to be filed if the total payments to the recipient exceed $600 in the calendar year.)

Note: There are special withholding rules related to payments made to non-resident aliens. Please call Payroll at x9776 regarding these requirements.

  1. How do I request reimbursement for gifts, prizes and awards?
    If you are spending University monies for gifts, prizes or awards, regardless of the amount, you must identify the recipients by completing the Gifts, Prizes or Awards Recipient Information form found at the Kettering Web site under Business Office - Forms and send it to Accounts Payable along with a properly approved Funds or Materials Request form and the receipt of purchase. We will be unable to process any requests for reimbursement if this information is not provided.

Direct additional questions regarding gifts, prizes or awards to Renée Abraham at x9803.