To provide instructions for submitting time entry transactions for taxable Non-Cash Merit Awards.
M/C employees who receive Non-Cash Merit Awards that meet the following conditions:
- All "cash equivalent" non-cash merit awards, such as gift certificates and bus or subway tokens.
- Awards from all qualified award programs that exceed the maximum allowable limit of $1600 in the calendar year.
- Awards from all non-qualified award programs that exceed the maximum allowable limit of $400 in the calendar year.
At agency discretion and subject to overall agency spending allotments, all M/C employees are eligible to receive non-cash merit awards of up to $75 in value during a given State fiscal year. Pursuant to section 7.D of BPRM Item D-280, if non-cash merit awards are provided to employees, agencies are required to submit annual reports summarizing non-cash merit award actions to the Governor's Office of Employee Relations, with a copy to the Budget Division's Budget Services Unit - Labor Relations Section.
According to the Division of the Budget, non-cash merit awards are generally envisioned to be physical items (e.g., plaques, office decorations, hats, shirts, mugs) or special privileges (e.g., special parking spots) intended to recognize M/C employees for their valuable contributions to an agency. Such items or privileges are not counted as taxable income.
Alternatively, non-cash merit awards may consist of items such as store or restaurant gift certificates, bus tokens or transportation cards that are considered "cash equivalent". "Cash equivalent" non-cash merit awards are neither encouraged nor expressly prohibited.
Non-cash awards presented to employees under an achievement award program may be taxable to the employee under the U.S. Internal Revenue Code. The conditions for taxation are outlined in the OSC Procurement and Disbursement Guidelines, Bulletin No. G-153, dated September 28, 2000. In general, if the award is tangible personal property (other than cash, gift certificate or other cash equivalent items), it can be excluded from taxable income.
Appropriate taxes will be deducted for the value of the Non-Cash Merit Awards that meet the above criteria and are reported as a Time Entry transaction.
- Review OSC Procurement and Disbursement Guidelines, Bulletin No. G-153, relating to Employee Award Programs, issued 9/28/00. Web site link: http://www.osc.state.ny.us/agencies/gbull/g-153.htm
- Review guidelines for Non-Cash Merit Awards in Budget Policy and Reporting Manual Section D280, Performance Advances and Merit Awards for Managerial or Confidential (M/C) Employees, issued 3/22/02. Web site link: http://www.budget.state.ny.us/bprm/d/d280.html
- Identify "cash equivalent" Non-Cash Awards that must be reported as taxable income to the recipient, as outlined in the OSC Procurement and Disbursement Guidelines and the Internal Revenue Code.
- Submit a Time Entry Transaction, Taxable Non-Cash Award (TXA) to report the value of non-cash awards that must be reported as taxable income to the recipient. This will include:
- The value of "cash equivalent" awards.
- The value of non-cash awards from all qualified award programs that exceed $1600 in a calendar year.
- The value of all non-cash awards from non-qualified award programs that exceed $400 in a calendar year.
- Advise affected employees of the taxation requirement.
Questions regarding this bulletin may be directed to the Payroll Audit mailbox.