Teachers or tax experts

[Pooh Crew]

We (parents at our school) were just told by the PTA that gift cards given as gifts to teachers were taxable and had to be declared as income. Is this true? I've never heard of this and have even tried to find some sort of proof online, without success. I do know that if EMPLOYERS give EMPLOYEES gift cards, those are taxable, but that doesn't really apply for parents giving teachers Christmas gifts. Does it??? We are not employers.

Looking for some proof before I attempt to contradict the PTA...any ideas?

 

[barkley]

i did a google search and found this question covered on a cpa web-site. apparantly the taxation comes in if the gift cards or money is donated to the school to disburse to the teacher(s) which is actualy a fairly common practice with some private schools (they take up a collection from parents for teacher appreciation and other events-they were already doing this when i taught way back in the 80's). if the money (or gift cards) comes from the school to the teacher then it has to be declared and is taxable.

 

[Pooh Crew]

Thanks for the quick response! Yes, I had seen several responses where the money was distributed through the school and I understand how that would be taxable--and seen as coming from their employers. That seems logical.

But if I give my child's public school teacher a gift card to a restaurant for Christmas, PTA is telling us (and the principal even agreed with them) that the teacher would have to declare that gift card from me (the parent) as income. I do not think that is accurate and thought that the experts here on the Dis would know for sure.

So do any teachers have to deal with this?

 

[Cheshire Figment]

You may give an unlimited number of gifts to people. As long as the annual gifts to one person does not exceed $13,000 there is no need to file a Gift Tax Return. I think it fairly obvious that you would not be involved with this limit.

If a person is a recipient of a Gift it is not reported on their Income Tax at all.

If a parent gives a gift to a teacher directly there are no tax consequences.

However, if the parents give money to the school and the school then distributes it to teachers that is treated as a taxable bonus from the school.

So two real options. Have individual parents give gifts to individual teachers. Other is to have someone not officially affiliated with the school collect the money and then distribute it, making sure it does not go through any school account.

Mike (CPA Retired)

 

[Pooh Crew]

Thank you! That helps tremendously!

 

[simba20]

Here's another thing to think of.

For several years the State of Georgia gave out gift cards at the beginning of the school year ($100) to teachers/media specialists/other staff to buy supplies for their classrooms. The gift cards have not benn given out the past two or three years due to budget cuts.....anyway, my husband got these for several years and we never declared it as extra income on our taxes (fed or state). We have someone do our taxes, and he's never said anything about it to us either.