Employee Awards

n this video, I explain how the IRS treats employee achievement awards and what makes them tax-free. You will learn about the conditions for length-of-service and safety awards, the importance of choosing tangible personal property over cash or cash equivalents, the steps required to ensure awards are not disguised compensation, and the yearly dollar limits that affect both qualified and nonqualified plans. This overview will help employers and employees understand how to recognize service and safety achievements in a manner that adheres to federal guidelines.