Awards: Legal and Tax Issues
The chief legal consideration related to the awards offered in a recognition or incentive program is determining the value of the award for tax purposes. Generally speaking, employers must declare non-cash awards provided to employees if the fair market value is $600 or more. They must also provide employees with a corresponding IRS Form 1099 to file with their taxes.
See the following White Papers for more detailed information on tax and other issues related to employee incentives and recognition: “Tax Considerations for Incentive Programs,” and “Taxation of Employee Achievement Awards.”