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Internal Audit Office

Kansas State University
5 Anderson Hall
Manhattan, KS 66506-0118

 

785-532-7308
785-532-0186
internalaudit@k-state.edu

Retirement Recognition Gift Policy

Chapter 4812
Issued June 10, 1998

Table of Contents

.010 Introduction
.020 Taxing Guidance
.030 Policy
.040 Administration
.050 Questions

.010 Introduction

It is the practice of Kansas State University to recognize employees at the time of their retirement for their performance of duties and length of service. The University often awards various gifts and honoraria to its employees. Several methods are used to fund the retirement gifts. One method is for the employing department, college, or division to use funds already on deposit with the KSU Foundation to purchase a retirement gift. In other cases, cash contributions are collected from employees and friends, deposited in a KSU Foundation account and used to purchase a gift. In either case, the gift falls under an Internal Revenue policy that restricts the amount of non-taxable contributions given to an employee. The amount of the restriction depends on whether the university has a "qualified plan" for employee gifts other than cash. The policy stated below outlines the "qualified plan" for Kansas State University.

.020 Taxing Guidance

Internal Revenue Code Section 274(j) specifies that gifts, honoraria and tangible personal property may be given to an employee for various reasons, such as, length of service (retirement), productivity, or safety achievement. Cash gifts to employees are not eligible under this section of the code because any gift of cash exceeding $25 has traditionally been treated as compensation and reported as income on the employee's W-2. The code states that the allowable dollar amount limit for a tangible personal property gift is based on whether or not the employer has a "qualified plan". Without a "qualified plan," a gift of tangible personal property may not exceed $400, but with a "qualified plan," a gift of tangible personal property with a value up to $1,600 is permitted. The code also states the recipient must be employed for five years to be eligible for such an award and the employee must not have received a similar award in any of the prior four years.

.030 Policy

A dean, department head, director or individual representing the University in an official capacity, may provide a gift or honoraria of tangible personal property excluding cash, the aggregate of which will not exceed $1,600, to an employee in recognition of the employee's retirement from Kansas State University. Such gifts may include, but not limited to, honoraria administered by the KSU Foundation.

Likewise, an employee may accept a gift(s) of tangible personal property excluding cash, the aggregate of which will not exceed $1,600 from the employer as represented by the employee's dean, department head, director or other individual representing the University in an official capacity.

This policy is effective November 15, 1997.

.040 Administration

This policy will be administered by the deans, department heads, and directors of Kansas State University for compliance.

.050 Questions

Questions relating to this policy should be directed to the Division of Human Resources, at (785) 532-6277.