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De Minimis & Gift Card Guidelines

Cal Poly Humboldt IRS De Minimis and Gift Card Guidelines

Responsible Office: Financial Services

1. Purpose

These guidelines establish procedures for the issuance and management of de minimis fringe benefits and gift cards at Cal Poly Humboldt. They ensure compliance with IRS regulations and university policies, promote accountability, and prevent misuse of funds. Note: Cal Poly Humboldt staff or faculty MAY NOT be the recipient of a gift card.

2. Definitions

  • De Minimis Fringe Benefits: Benefits provided to employees that are so small in value that accounting for them is unreasonable or administratively impractical, as defined by the IRS.
  • Gift Card: A prepaid card issued by a retailer or bank, used as an alternative to cash for purchases.
  • Authorized Purchaser: An individual approved to purchase gift cards or de minimis benefits on behalf of a university department or program.
  • Recipient: An individual who receives a gift card or de minimis benefit.

3. General Guidelines

  • Purpose: De minimis benefits and gift cards may be used to provide small rewards, tokens of appreciation, or incentives for participation in university-related activities such as research studies, surveys, and events.
  • Restrictions: These items must not be used to bypass procurement or payroll policies or for personal gain.
  • Approval: All purchases and distributions of de minimis benefits and gift cards must be approved by the appropriate department head or authorized designee.

4. IRS De Minimis Fringe Benefits Guidelines

  • Value Limitation: To qualify as de minimis, the value of the benefit must be so small that it is impractical to account for it. Generally, items worth $100 or less can be considered de minimis, but this can vary based on frequency and the specific nature of the benefit.
  • Examples: Common examples include occasional snacks, small holiday gifts, or event tickets.
  • Frequency: The benefit must be provided infrequently to qualify as de minimis. Regular or frequent benefits may not be considered de minimis, regardless of their value.

5. Gift Card Guidelines

  • Value Limitation: Individual gift cards must not exceed $100 in value without additional approval. Gift cards exceeding this value may be considered taxable income to the recipient. Cal Poly Humboldt staff or faculty MAY NOT be a recipient of a gift card.
  • Documentation: Maintain detailed records of gift card purchases, including receipts, approval documentation, and distribution logs.
  • Distribution Log: Maintain a log of distributed gift cards, including the recipient’s name (or identifier for confidential studies), date of distribution, and signature of the recipient (if applicable).
  • For gift cards to students, see Payments to Students (Section 5)

6. Purchase Procedures

  • Authorized Purchases: Purchase gift cards from vendors where the funding source allows for the purchase. 
  • Documentation: Keep detailed records of all purchases, including receipts and approval documentation.
  • Allowable Purchases: The purpose of purchase typically falls within the following categories: 
    • Incentive for research study 
    • Reward for survey participation
    • Token of appreciation
    • Event participation

7. Distribution Procedures

  • Confidentiality: For activities requiring confidentiality, use codes or identifiers instead of recipient names in distribution logs.
  • Limitations: Ensure individual gift card amounts do not exceed $100 without additional approval, and that the total value distributed per event or activity is reasonable and justifiable. Any tangible item over $100 given to staff or faculty will need to be reported to Payroll as a taxable fringe benefit.

8. Use Restrictions

  • Intended Use: Ensure de minimis benefits and gift cards are used solely for the approved purposes and adhere to the Hospitality Guidelines.
  • Prohibited Uses: De minimis benefits and gift cards cannot be:
    • Exchanged for cash
    • Used to purchase prohibited items
    • Given as rewards for regular job performance (use payroll for such compensation)

9. Accountability and Compliance

  • Monitoring: Departments are responsible for monitoring the use of de minimis benefits and gift cards to ensure compliance with these guidelines.
  • Audit:. Departments must provide all requested documentation.
  • Misuse: Any misuse or failure to comply with these guidelines may result in disciplinary action.

10. Exceptions

  • Approval for Exceptions: Obtain written approval from the appropriate Vice President for any exceptions to these guidelines. Any exceptions over $100 will be subject to IRS guidelines as stated above.
  • Justification: Provide a detailed justification for the requested exception.

 

 

These guidelines aim to ensure the ethical and proper use of de minimis fringe benefits and gift cards at Cal Poly Humboldt, supporting the university’s commitment to accountability and compliance with IRS regulations.