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ACordell
March 17, 2021
Question

Employees collection for Co-worker

  • March 17, 2021
  • 1 reply
  • 0 views

Employees took up a collection for a co-worker.  The company agreed to match the collection dollar for dollar.  What account does this need to be coded to when writing the check and the employee not be taxed on it?

1 reply

john-pero
john-pero
March 18, 2021

Owner Draw. This not an expense but qualifies as person to person gifts exempt from gift tax. The exclusion (exempt from tax and exempt from filing) this year is $15,000 per individual to individual. You and your spouse can combine to the employee and if they are married a total of $60,000.  There is no limit on the total of gifts like this you can make - they are not taxable to revipient bit at same time are not a business expense 

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