My employer gave me a monetary gift for being the longest employed in the company's history...................

Question

Now, I am being charged Federal and SE taxes on it. Is that right?

Answer 1

Usually monetary gifts must be included in wages and subject to all the associated taxes.

As is always the case with tax laws there are exceptions. Some small gifts can be considered "De Minimis Fringe Benefits" and are excluded from income.

The are also exceptions for "Safety Awards" and Length of service awards (However, these specifically exclude cash/cash equivalents)

Unless very specific criteria are met, I would suspect your employer was correct to withhold taxes.

Answer 2

Yup. Your company is required to report taxes on all monetary compensation to it's employees....and for that matter, so are self employed people. And Bonuses are not excluded.

Answer 3

Yes Sir: The TAX man commith.

Answer 4

Yep, it happens.
My boss gave cash at Christmas every year, but on next pay check there it was having taxes taken out of it.

Answer 5

Yea it's legal. My old company used to hold monthly meetings, and they would hold a drawing for all the names of those who came and give them 10.00 cash. I won once, and they next pay period it was taxed on my check!!

Answer 6

Yes, you have to pay taxes on it. It is after all income. Gift,prize,or bonus, it doesn't matter. The IRS still calls it income.

Answer 7

Any money given to you by your employer is wages, unless it is reimbursement for expenses.

Answer 8

There are only two certainties in life - death and taxes. Which do you prefer?

Answer 9

Unfortuantely, that's how the system works. It's still considered income. :(

Answer 10

sounds like a nice big bonus! good job!