Companies often give workers items with their logos on them as gifts, never even considering whether they’re taxable income.


In many cases they are, according to a presentation at the 2018 American Payroll Association (APA) Congress.


Cost isn’t the issue


While some say items like logo T-shirts fall under the IRS’ de minimis guidelines, since they’re relatively low cost, that isn’t always true.


With gifts of this nature, what matters isn’t the cost of the item, but whether its value is “reasonable and accountable.” If the company keeps inventory of the items, and their cost is easily tracked, they’re most likely taxable gifts under IRS guidelines.


Also important is whether the items are regularly given to employees. If so, they may be taxable.


Note: Exceptions do apply – such as if logo products are distributed to employees for testing purposes. They aren’t taxable in that case.


Cite: Taxable and Nontaxable Fringe Benefits, Part 1, presented by Fred Baseshore, Jr. CPP.