Gift Card/Cash Equivalents Policy 

1.0 Policy Purpose 

This policy states the circumstances under which cash equivalents (gift cards and ID Office tender additions) may be purchased and distributed using Ithaca College funds, as well as the tax implications for recipients.  

2.0 To Whom the Policy Applies 

This policy applies to all Ithaca College (the “College”) faculty, staff, affiliates, and students. 

This policy does not apply to cash equivalents purchased using personal funds.   

3.0 Policy Statement 

Cash equivalents, regardless of value, are considered taxable by the Internal Revenue Service (IRS). Anyone purchasing cash equivalents for distribution using College funds is responsible for compliance with IRS regulations and College policies. Individual gift cards may not have a face value greater than $50. 

Tax Reporting for Employees: 

For an individual who was an employee of the College at any time during the calendar year in which one or more cash equivalents were received, the total amount of cash equivalents received will be included as reportable compensation on the individual’s IRS Form W-2 or Form 1042-S as applicable.  The only exception that applies to this guidance would be if meal money or transportation fare is occasionally provided to allow an employee to work beyond normal hours.  This exception must first be documented and approved by a supervisor. 

Tax Reporting for Non-Employees: 

The total amount of cash equivalents received in a calendar year will be aggregated with any other non-employee compensation received by the non-employee during the same calendar year to calculate total reportable nonemployee compensation. Total nonemployee compensation will be reported on the individual’s IRS Form 1099-NEC or Form 1042-S as applicable and is dependent on reporting thresholds.   

Nonresident aliens who receive cash equivalents are subject to 30% federal tax withholding. Because the withholding cannot be withheld from cash equivalents, the withholding amounts may be recorded as additional expenditures to the College department that purchased and distributed the cash equivalents at the discretion of management. 

3.1 Allowable Circumstances: Cash Equivalents 

Cash equivalents may be purchased and distributed under certain circumstances including: 

  • For distribution at an event, (e.g., prize drawing or merit-based award). 

  • For volunteers who are not College employees, students, researchers, or contractors. 

  • Institutional Review Board (IRB) approved research study participants. 

  • For students in emergency situations. These purchases must first be approved by the Dean of Students and the transactions must also be entered and flow through the Dean of Students department. 

3.2 Unallowable Circumstances: Cash Equivalents 

Cash equivalents may NOT be purchased or distributed under the following circumstances: 

  • As gifts for College employees, students, researchers, suppliers, or contractors currently under contract at the College. 

  • For suppliers or consultants for goods and/or services provided. 

  • All other circumstances where the criteria in section 3.1 is not met. 

3.3 Mechanism for Acquisition of Cash Equivalents 

  • Gift cards: College-issued purchasing cards (P-cards) are the only allowed mechanism for purchasing gift cards.  Clearly note “gift card” in the description field within the P-card expense reports. The process for approval will follow the established P-card approval process.  

  • ID Office tender additions: ID Express Points, ID Express gift cards, Bomber Bucks, and meal plan swipes purchased using departmental funds should be submitted via Formstack form.  See Section 7.2. 

4.0 Responsibilities 

All individuals to whom this policy applies are responsible for becoming familiar with and following this policy. College supervisors are responsible for promoting the understanding of this policy and for taking appropriate steps to help ensure compliance with it.  

The Gift Card Purchaser is responsible for: 

  • Establishing process/procedures for tracking/safeguarding cash equivalents and information collected.   

  • Providing awareness of the tax requirements as stated in this policy. 

  • Developing and overseeing controls over cash equivalents in the department. 

  • Completing the Gift Card Form which captures the information for the recipient of the cash equivalents. See section 7.2 

5.0 Consequences for Violating this Policy. 

Failure to comply with this and related policies is subject to disciplinary action, up to and including, suspension without pay or termination of employment or association with the College, in accordance with applicable disciplinary procedures. Non-compliance costs imposed by a tax authority may be passed on to departments which fail to comply with this policy. 

6.0 Definitions 

For this policy, the terms below have the following definitions: 

Cash equivalents: 

A form of payment, physical or virtual, for a specified cash value of goods or services. This includes but is not limited to:  

  • Gift cards: Cards or certificates issued by physical stores (e.g., chain, department, or grocery stores, including the Ithaca College Campus Store), online stores, and restaurants. 

  • ID Office tender addition: Additions to all tenders managed by the college ID Office, including ID Express Points, ID Express Gift Cards, Bomber Bucks, and Meal Plan Swipes. 

Gift Card Form: 

A form required by the Accounts Payable Department and Human Resources Department used to capture information about recipients of cash equivalents to aid in issuing applicable tax forms to recipients. The Gift Card Form will consist of information including, but not limited to, cash equivalent amount, recipient name, address, College ID number, and whether the recipients are employees or non-employees.  

Gift Card Purchaser:  

Employee who initiates Gift Card purchases or ID Office tender additions.   

7.0 Related Information 

Ithaca College is a community in which employees are encouraged to share workplace concerns with college leadership. Questions and concerns regarding this policy can be brought to the attention of the Director of Procurement. 

The following information complements and supplements this document. The information is intended to help explain this policy and is not an all-inclusive list of policies, procedures, laws, and requirements. 

7.1 Related Policies 

7.2 Related Forms 

Policy Owner: Vice President for Finance and Administration and Chief Financial Officer 

Policy Approved by: Vice President for Finance and Administration and Chief Financial Officer 

Contact Information: Accounts Payable 

Policy History 

Policy Issue Date: December 2023 

Policy Effective Date: January 1, 2024