Generally, when you receive prizes or awards from employer for outstanding work, you should include the fair market value of prizes or awards into your income, except you get them from charity or non-profit organization. There are some rules for specific awards:
Back pay awards:
These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums, and unpaid health insurance premiums.
Employee achievement award:
If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. The amount is limited to the lesser of:
- Employer's cost
- 1600, or 400, if awards are not qualified plan awards
But the exclusions does not apply to the following awards:
- A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years.
- A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year.
PSQ
Source: http://www.irs.gov
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