Gift Cards Count as Taxable Income According to Tax Cuts and Jobs Act

Employee awards in the form of gift cards are considered taxable income, says the 2017 Tax Cuts and Jobs Act, putting to rest a long period of ambiguity in regard to the issue. The new law includes a provision which differentiates cash, gift cards, gift certificates, and cash equivalents from “tangible property” such as watches, pens, and plaques – all of which are nontaxable.

Other employee award items that are considered as taxable income by the IRS include:

  • Gift coupons
  • Vacations, meals, and lodging
  • Tickets to theater productions or sporting events
  • Stocks, bonds, and other securities

This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.


Follow @ecfa