Gift Cards to employees taxable it seems

Gift Cards from employers must be considered taxable income

Loopholes closing on Gift Cards from the boss!

A landmark case against Hallmark has set the latest precedent in the gift card taxation arena. For years Hallmark had been giving employees gift cards and in an effort to avoid taxation they had pressed that the gift cards be used for merchandise only. This has been challenged and been decided that any gift card be treated as income even if it is designated to purchase items that would not be considered as such.

Message here is that if you work as a travel agent and you are given gift certificates or gift cards to Hilton hotels, unless you really want to use the hotel cards you might want to simply ask for cash because you will be taxed the same.

Certainly this direction of the law has not slowed gift card giving by employers. Many companies including giftcertificates.com have been built around the idea. Gift Cards are almost the perfect gift for employees to recieve - warmer than cash yet full of options.