Tax Laws Related to Service Award Deductions

Section 274
PUBLIC LAW 99-514 – OCT. 22, 1986

To comply with the rules, and be free of taxes, awards must:

  • Be part of a “qualified plan” that does not discriminate in favor of highly compensated employees.
  • Be an item of Tangible Personal Property awarded as part of a meaningful Presentation.
  • Fall under an average award cost of $400 with an upper limit of $1,600.
  • Service Awards may be given every five years beginning at five years of service.
  • Program is Tax Deductible for Company and non-taxable income for the recipient.




Our C.A.R.E. (Create Award Recognition Environment)® approach ensures that your theme-based Corporate Award Program provide lasting reminders people will remember for years after the celebration of recognition achievements, including:

  • Customized Program Website
  • Customized E-Admin System
  • Customized Awareness Campaign Materials
  • Access to Comprehensive Recognition Systems

Once the budget is determined, we can assist you in designing a Custom Service Award Program that can convey powerful meaning to employees for:

  • On-Boarding
  • Career Milestone Anniversaries
  • Retirement Awards

We can also support your Global fulfillment requirements:

  • Custom Website Language of Origin
  • Global in Country Fulfillment
  • Eliminate Duties, Tariffs and Import Taxes