Gifts, prizes and awards

• Rules and regulations

  IRS regulations require the reporting of gifts, prizes and awards as taxable income to the recipient if the gift, prize or award meets certain criteria.

  The a "Gift, Prizes and Awards Recipient Information Form-Employees and Nonemployees" or "Gift, Prizes and Awards Recipient Information Form-Student Only"form is used to record the information of a gift, prize or award that was allocated to account 72312 "Prizes and Awards REPORTABLE" or 72952 "Internal Purchases-Prizes REPORTABLE". This form must be turned into the Tax Accountant within 7 days of issuing a reportable gift, prize or award to a person.

  Please note that these reportable gifts, prizes and awards will be included as taxable income on employee's W-2 forms and on non-employee's 1099-M forms.

  If you have any questions, please contact Amy Sands in Accounting at 970-351-1828 or amy.sands@unco.edu.

• Completing the form

  Complete with person's name, address and SSN, ITN or Bear number.

  • Check the box of the recipients status. It is possible for recipient to be a student AND an employee or non-employee.
  • Any time the student box is checked AND the gift, prize or award is cash or gift card, Financial Aid must approve the payment before the recipient receives the cash payment or gift card.

  Cash

  • Subject to taxation to all statuses and all amounts
  • Will be included on employee's W-2 and non-employee 1099

  Gift Card

  • Subject to taxation to all statuses and all amounts
  • Waiver must be approved before purchase of gift cards
  • Will be included on employee's W-2 and non-employee 1099

  Non-cash

  • Subject to taxation to all statuses if above $50
  • Will be included on employee's W-2 and non-employee 1099

  FOAP

  • 72312 - Prizes and Awards REPORTABLE- Cash prizes of any value, gift cards of any value, non-cash awards over $50 in value. MUST turn in a Gift, Prizes, and Awards Recipient Information Form to Accounts Payable within 7 days.
  • 72313 - Prizes and Awards NONREPORTABLE - Any non-cash awards under $50 in value.
• FAQ's

  Q.  Are gifts, prizes, and awards considered taxable income?

  A.  It depends. Cash and gift cards always will be taxable. Non-employees will get a 1099 if they receive more than $600 in a year and employees will always have the amounts added to their W-2. Tangible property above $50 will have the same taxation rules applied.

  Q.  What do I need to do if the gift, prize, or award is being given to a student?

  A.  Any cash or pre-approved gift card MUST be approved by Financial Aid prior to being distributed to the student. These awards can affect a student’s financial aid award and may need to be distributed to them via Financial Aid.

  Q.  Why are purchases of gift cards not allowable?

  A.  Gift cards must be pre-approved by the University Tax Accountant in writing (Gift Card Waiver). This is to minimize risk and be compliant with IRS and other applicable rules.

  Q.  How will this be reported to the IRS?

  A.  All taxable awards to employees will be reported on the recipient’s W-2. All taxable awards to non-employees above $600 will be reported on the recipients 1099-M form.

  Q. What happens if I need to provide gift cards to people for participation in an anonymous confidential study?

  A. See confidential/anonymous research subject section below.
• Confidential/Anonymous Research Subjects

  This outlines the procedures and methods of payments to confidential/anonymous research subjects at the University of Northern Colorado (UNC), including Internal Revenue Service (IRS) tax reporting requirements. This applies to all confidential/anonymous clinical trials or research protocols that provide compensation to research subjects. It is the responsibility of the investigator to take the appropriate steps to maintain the confidentially of the research subjects when making payments and to comply with IRS and University reporting requirements.

  • Policy Statement
    • Approval

      All confidential/anonymous clinical trials or research protocols involving research subjects require prior approval from UNC's Institutional Review Board (IRB) or from an IRB acceptable to UNC's IRB.

    • Taxable Income

      All payments to research subjects are considered "compensation" for time and inconvenience and are considered taxable income to the recipient per the Internal Revenue Code. The research subject must be provided a "Tax notice", regardless of the dollar amount to be paid during the calendar year, informing the individual that any cash payments, gift certificates / cards, money orders and or non-cash items that are received in exchange for being a participant in a clinical trial, protocol, or survey, are taxable income.

    • Tax Reportable

      Tracking of research subject payments is required for IRS 1099 reporting purposes for full-board protocols that pay each confidential/anonymous study subject more than $50 in gift cards, cash of any amount and non-cash items over $50. In this case, a "Gift, Prizes and Awards Recipient Information Form-Employees and Nonemployees" or "Gift, Prizes and Awards Recipient Information Form-Student Only" must be filled out for each research subject including their tax reporting information.

    • Non Tax Reportable

      Tracking of research subject payments for 1099 reporting purposes is not required for exempt protocols and expedited protocols for confidential/anonymous studies once the "Confidential/Anonymous Research Subjects Gift Card Purchase Waiver Request" is approved. Tracking is not required for full-board protocols that pay each study subject $50 or less in gift cards. The participant must be given a "Tax Notice" so that they are aware of the tax implications of the gift card they receive.

    • Internal Controls

      Internal controls over research subject payments are required at all times. Each confidential/anonymous clinical trial or research protocol must provide for the proper safeguarding of gift cards, cash or non-cash items:

      • Securing. Gift cards, cash or non-cash items should be secured at all times (e.g. locked box in a locked cabinet or drawer).
      • Permissible Use. All payments to confidential/anonymous research subjects must be done in accordance with the approved IRB protocol.
      • Custody. A single individual must be designated custodian of the gift cards, cash or non-cash items. Custody may be transferred temporarily from the primary custodian to other departmental personnel for purposes of dispensing research subject payments. Any change in custodian must be reported to the Controller, or Controller designee.
      • Tracking of research subject payments. Research subject payments should be documented by a pre-numbered receipt book or equivalent method designed to uniquely identify each payment. Standard receipt books are a two-part form available at office supply stores. Another option is to fill out the "Participant Disbursement Log". Information to be included on each receipt shall include at a minimum:
        • Study subject name or ID (the research subject ID is any number assigned by the department to identify the individual in order to protect their confidentiality)
        • Date
        • Purpose of the payment
        • Serial number applicable to gift card
        • Payment Amount
        • Initialed by the study subject
      • Lost. Employees are held responsible for any gift cards in their possession that are lost or misplaced. Any shortage must be reported immediately to the Controller, or Controller designee and the campus police department.
    • Methods of Payment

      Gift cards
      Non-cash items

  • Procedures

    Gift cards

    If payment to Confidential/Anonymous Research Subjects is to be made by gift cards, approval must be obtained from the Regulatory Compliance Administrator who will forward to the Tax Accountant for approval prior to making any payments to Research Subjects.

    Researchers must complete a "Confidential/Anonymous Research Subjects Gift Card Purchase Waiver Request" form and submit the form to the Regulatory Compliance Administrator who will forward to the Tax Accountant for approval. The IRB protocol section that describes compensation to research subjects, and the IRB Approval Letter must be attached to the waiver request form.

    Once the waiver form is approved, gift cards may be given out to participants for $50 or less per participant.

    If an amount over $50 is necessary, the participant's tax information must be obtained and a "Gift, Prizes and Awards Recipient Information Form" must be filled out for each research subject.

    Non-cash items

    If payment to research subjects is to be with non-cash items, such as a t-shirt or mug, no tracking or tax information needs to be obtained from the participant for those items less than $50 in value.

    For non-cash items with a value over $50, the participant's tax information must be obtained and a "Gift, Prizes and Awards Recipient Information Form-Employees and Nonemployees" or "Gift, Prizes and Awards Recipient Information Form-Student Only" must be filled out for each research subject.

  • FAQ'S

     

    Q. What happens if I want to provide gift cards as compensation for participation in a confidential/anonymous study and I am unable to collect tax information from the participant?

    A. Gift cards for confidential/anonymous research subjects may be allowed, but must first be approved by the Regulatory Compliance Administrator and the University Tax Accountant. To seek approval, submit the "Confidential/Anonymous Research Subjects Gift Card Purchase Waiver" form, to the Regulatory Compliance Administrator. Please note that your IRB approval letter and the sections of your approved protocol that describes compensation to research subjects, as well as states that the study must be kept confidential/anonymous must be attached with the waiver request.

    Q. If this waiver request is granted for gift cards to be disbursed to individuals participating in a confidential/ anonymous study, what other paperwork do I need to fill out?

    A. Research subject payments should be documented by a pre-numbered receipt book or equivalent method designed to uniquely identify each payment. Standard receipt books are a two-part form available at office supply stores. Another option is to fill out the "Participant Disbursement Log".

    Q. After this waiver is approved, is there a dollar limit on the each gift card given out?

    A. The limit is $50. If more than $50 is given out to each individual, regardless of this waiver, a "Gift, Prizes and Awards Recipient Information Form-Employees and Nonemployees" or "Gift, Prizes and Awards Recipient Information Form-Student Only" must be filled out and turned in to the Tax Accountant within 14 days of card distribution.

    Q. What if I need longer than 14 days to give out the cards after I have purchased them?

    A. Please provide the number of days needed (up to 30 days), as well as, proper justification for this need and obtain approval from the University Tax Accountant.

    Q. What are the tax implications for payments to the research subjects participating in a confidential/anonymous study and receiving a gift card as compensation?

    A. Please provide each recipient with a "Tax Notice to Study Subjects," so that they are aware that the gift card they are receiving should be considered taxable income on their yearly tax return.

    Q. How will the University report taxable income?

    A. A gift card of any amount given to a participant in a confidential/anonymous research study is taxable income to the participant. For research studies that have undergone an exempt or expedited review, the University has determined that it will not report gift card income for confidential/anonymous research subjects receiving $50 or less on IRS Form 1099, due to the confidential/anonymous nature of data collected on these research studies and the inability to obtain participant tax information. The participants will receive a "Tax Notice" so that they will be made aware that this gift card should be considered taxable income on their annual tax return. If the gift cards are $51 or more per recipient, tax information must be collected, so that this information can be reported on IRS Form 1099.