Hello Mustachian friends!
I'm hoping there might be an HR/Tax whiz out there that can help in my current situation. I'm afraid this is more of a vent thread than a solution thread, but I'm very irritated and no one in my company in any position of answering questions is being much assistance.
Our company gave incentives for participating in a United Way campaign in September. Incentives included everything from $10 restaurant gift cards and company branded umbrellas to iPad Minis and $500 Visa Gift Cards. Now (three months later), the 100 people who won those incentive items are being taxed on the value of their winnings at 40% of the value (ex. $4.07 taken off the person who won the $10 restaurant gift card -- Yes, I realize that I won't end up paying 40% come tax time, but I'm still irritated by the whole principle of the matter). There was no warning or notice that this would happen and winnings/gifts like this have NEVER been taxed by the company before.
I think I'm more upset about it because our HR department is being quite difficult and rude about the situation. I was told by the head of HR that we as employees should have expected taxes on these items (to which I reminded her we have NEVER been taxed like this before in the history of the company). Just this summer I won a $50 gift card and paid no additional taxes.
I've been reading up on the topic and it seems like the company should have been taxing us all along. I guess my question then comes to, can they suddenly begin doing this with no notice to employees?
To my tax-smart friends, is there anything we (the winners) can do in this situation? Or are there situations gifts wouldn't be taxed that I should look to be part of in the future? At this point I'd rather not win a $10 gift card if I'm going to worry about taxes being taken out of a random, future paycheck.
Thank you for listening! /endrant :P