HCAH-AP: Gift Cards & Certificates

This policy sets forth the guidelines and procedures for the purpose and distribution of gift cards/certificates purchased with District funds to ensure compliance with the Districts’ tax withholding and reporting obligations.

Gift cards to staff members are prohibited. Gift cards for students can only be purchased with Fund 60 (non-general fund) dollars.

Per Internal Revenue Service (IRS) Regulations, gift cards are taxable to the recipient and must be reported as income to the IRS. In addition, because the IRS considers them to be cash equivalents, there is no de minimums value (See IRS Publication 15-B page 9 De Minimis [Minimal Benefits]). All cash and cash equivalents must be reported on a tax return. For this reason, gift cards to employees are not allowed. Gift cards to students cannot be purchased with general fund dollars and are not allowed if they are in lieu of payment for services.

The department or staff member issuing a student a gift card using Fund 60 dollars will be responsible for collecting and submitting to the Accounting Department the name, grade, student ID, vendor (e.g., Hornbacher’s, Walmart, etc.) card amount, reason the gift card was distributed, and budget code for any student receiving a gift card. Any student nearing the IRS income threshold will be required to complete a W-9. A blank W-9 form can be found on the Accounting Department’s website. When appropriate, completed W-9 forms should be sent to the Accounting Technician in the Accounting Department.

If an employee improperly receives a gift card, the gift card amount will be added to the employee’s W-2 at the calendar year end.

Adopted: 05/05/20

Reviewed:

Revised: