Due to required tax reporting by the IRS to the recipient of a gift card or gift certificate, and the significant penalties for lack of compliance with such laws, the University’s policy is that it is not appropriate to purchase gift cards or gift certificates with University funds, with limited exceptions for transactions that are compliant with federal guidelines. In general:
- Gift cards or gift certificates to University employees, including student employees, are NOT allowed. These payments should occur through Payroll so appropriate tax can be withheld.
- Accounts Payable must be notified any time a gift card or gift certificate is given out. We are required to collect the recipient’s name, the date of the award, the value of amount awarded, and the purpose.
- Reimbursement requests related to taxable awards will not be honored unless accompanied by a list naming each recipient, date of award, and value of amount awarded.
- Bookstore gift certificates are not allowed to be purchased using a department budget code until approval is given by the Business Office. To receive approval, e-mail a list naming each recipient, date of award, and value of amount awarded to email@example.com. The Business Office will notify the requestor and the Bookstore once approved.
- If the recipient of any gift card or gift certificate is a foreign national/nonresident alien, the initiating department will be charged an additional 30% for appropriate tax withholding.
It is important for individuals receiving these awards to be made aware of the potential income tax consequence.
If SLU pays $600 or more to a US tax resident during the calendar year, then SLU is required to report the payments to the IRS and issue the recipient a Form 1099. Those wishing to make payments to foreign nationals should contact Donna Martell in the Business Office for further information.
The only exception to this policy is the use of gift cards or gift certificates for Human Subject Research Compensation:
Generally, for human subject research compensation, we will allow payments of $75.00 or less to be made by cash or gift card and will not require collection of a participant’s identifying information. Payments greater than $75.00 must be paid by an accounts payable check with a vendor record setup in the system. In the event of an IRS or sponsored audit, it will be the responsibility of the Researcher to supply all required supporting documentation for human subject payments made from the researcher’s accounts.