This section is to provide guidance to academic and administrative units regarding the university's tax reporting obligation for prizes and awards granted by the University. Prizes and awards that are presented to university employees are generally reportable as additional compensation subject to tax withholding, in the absence of an applicable exception as defined below. Prizes and awards that are presented to non-employees must be reported to the recipient and the IRS by the university as other income if the value exceeds the calendar year reporting limit of $600.
An award can be cash or a non-cash item given to show thanks, support, goodwill or recognition of an outstanding accomplishment, such as, but not limited to, achievement in teaching, research, or other job performance related activity.
A prize can be cash or a non-cash item given at random or as a result of chance, not directly related to job performance. Examples include, but are not limited to, random door prizes at university sponsored events or a prize for a classroom competition.
Cash and Cash Equivalents
Cash awards or prizes, including gift certificates and gift cards, are considered supplemental wages and reportable as taxable compensation, regardless of the dollar amount and beginning with the first dollar.
A non-cash prize/award consists of tangible personal property such as a plaque, electronic equipment, t-shirts, mug, key chain, etc.
Examples of Prizes/Awards
- Classroom competitions
- A prize to reward outstanding performance
- Random door prizes
- Recognition of achievement in teaching/research