AWARDS, PRIZES & CASH EQUIVALENTS

Award

For the purposes of this policy, an award is a cash equivalent given, usually to an employee or student, in recognition of past accomplishments. The recipient has made no formal entry or submission and the recipient did not undertake the recognized activity primarily for the financial benefit of the award (see Prize below).

Departments are to charge employee awards to spend category code SC0089 (Recognition Awards). Departments are to charge student awards to SC00297 (Awards).

Business Gift

For the purposes of this policy, a business gift is a cash equivalent given to an individual to express gratitude or appreciation for support of the University’s mission. The recipient performed no service nor provided other consideration in exchange for the gift.

Departments are to charge business gifts to spend category code SC0089 (Recognition Awards).

Cash Equivalents

Cash equivalents are stored-value products such as gift certificates and gift cards. The IRS specifically defines these instruments as cash equivalents and states that their value is considered taxable income to the recipient, regardless of dollar value.

Gift Card or Gift Certificate

A gift card or gift certificate entitles the recipient to receive goods or services of a specified value from the issuer.

Prize

For the purposes of this policy, a prize is a cash equivalent presented as a result of participation in a contest, drawing, or judged competition (see Award above).

Departments are to charge all prizes to spend category code SC0150 (Prizes).

Research Participant Payment

For the purposes of this policy, a research participant payment is a cash equivalent offered to an individual (including a study subject) as incentive to participate in a research study.

Departments are to charge research participant payments to spend category code SC0124 (Research Subjects).

Substitute W-9

A Substitute W-9 is a form the IRS allows as a substitute for IRS Form W-9. WSU uses the Record of Distribution and Request for Taxpayer Number and Certification (Substitute W-9). (See BPPM 45.53).

Allowable Uses

University personnel are to use cash equivalents in only the circumstances outlined in the Allowable Uses of Cash Equivalents table.

ALLOWABLE USES OF CASH EQUIVALENTS

Allowable uses of cash equivalents and appropriate funding sources are presented in the table below. No other use of gift cards or other cash equivalents is authorized without the Controller’s specific, written approval in advance of the purchase of the cards. 

DEFINITION OF CASH EQUIVALENTS

Cash equivalents are stored-value products such as gift certificates and gift cards. The IRS specifically defines these instruments as cash equivalents and states that their value is considered taxable income to the recipient, regardless of dollar value. See IRS.

DEFINITION OF PRIZES

A prize is a cash equivalent presented as a result of participation in a contest, drawing or judged competition. Prizes should be expensed to Spend Category SC00150 (Prizes).

DEFINITION OF AWARDS

An award is a cash equivalent given, usually to an employee or student, in recognition of past accomplishments. The recipient has made no formal entry or submission and the recipient did not undertaken the recognized activity primarily for the financial benefit of the award. Awards should be expensed to Spend Category SC00297 (Awards).

DEFINITION OF BUSINESS GIFT

A business gift is a cash equivalent given to an individual to express gratitude or appreciation for support of the University’s mission. The recipient performed no service nor provided other consideration in exchange for the gift. Business gifts should be charged to Spend Category SC000089 (Recognition Awards).

TAX REPORTING

IRS regards gift cards as cash equivalents which creates tax and reporting implications for both the recipient and the University. When gift card distribution occurs, it is important for the protection of the recipient, department personnel, and WSU that the appropriate tax reporting processes are followed, see BPPM 70.44.

TANGO CARD

WSU has authorized the use of Tango Card which supports purchase and distribution of a wide variety of gift cards online. There is no service fee. Departments may directly establish an account with the supplier and use the Purchasing Card for payment. For more information please visit https://www.tangocard.com.Please note: The department must maintain a distribution log for payments of cash, gift cards, and other cash equivalents. These records must be retained according to normal retention policies.