holiday

Taxpayer asks:

I think this should be an easy question for you… are monetary gifts ($250) given to employee spouses taxable as W-2 wages to the employee?

Taxgirl says:

Au contraire. This one feels like it should be easy but it isn’t. And the reason it’s not easy is because I am fairly certain that I have the answer but I can’t find any official documentation to back me up.

So here you go… My answer is yes. As I pointed out in a prior post regarding holiday gifts, the general idea of a gift is that you’re making it out of “love and affection” without any expectations. When your employer makes a gift to your spouse, there is an expectation. If you weren’t around as the employee, that gift would never have been made. So it seems to me that it’s really a gift to the employee and not to the spouse – the idea is to keep the employee happy (which as any good spouse knows only happens when the spouse is happy).

That said, while there are clear attribution rules for spouses and family members with respect to stock ownership and other areas of tax law such as travel and entertainment, I can’t find anything that clearly states that the rules are the same here. Anyone?

(Psst, in the interest of disclosure, this question was submitted by a colleague and not originally as an “ask the taxgirl” question. But hey, it’s my blog and I’ll post if I want to.)

Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.

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