In order to remain compliant with IRS regulations, we will be recording taxable fringe benefits provided by the College to employees beginning January 1st, 2020. These items include clothing, accessories, etc. Clothing provided by the College must meet specific qualifications in order to not be considered taxable. Clothing and accessories must be:
- Specifically required as a condition of employment
- Are not worn or adaptable to general usage as ordinary clothing
Clothing that meets these qualificationsinclude scrubs, culinary uniforms, and security uniforms. Any clothing item that does not meet these specifications will be considered a taxable item and will be included with the employee’s taxable wages and withholding will be deducted. Items that are considered taxable include clothing such as: polo shirts, button downs, and cardigans. (The addition of the school logo does not change the fact that these items will be taxable.)
According to the State of WV Ethics Act, Employees are permitted to receive unsolicited gifts in the amount of $25/person or less per year. This can be an option when considering the need to purchase clothing. Additionally, an employee can decline the clothing or the employee can return the clothing after the event. In these instances, the item will not be a taxable benefit.
AP will be tracking all clothing/accessory related purchases, regardless if the clothing item will be given as a gift or considered taxable. AP will complete the attached voucher for each clothing purchase. The employee receiving the clothing item will then be asked to sign the clothing voucher, acknowledging their receipt of the item. If the item will be taxed, the completed form will be submitted to Human Resources to be included in the employee’s taxable wages.
Please see the attached PowerPoint presentation from the State regarding what is considered taxable and non-taxable.
For more information about the State of WV Ethics Act, please visit the West Virginia Ethics Commission website.