There is a limitation of $25 per donee on the deduction of gifts to employees for length of service.

Question

Quizplus · Accepted Answer

The IRS allows employers to deduct gifts to employees as a business expense, but there is no specific $25 limit per donee for length of service awards. Instead, certain conditions must be met for the gift to be deductible and not taxable to the employee, such as the award being part of a meaningful presentation and not seeming to be disguised compensation. The actual limitation concerns the type of award (e.g., tangible personal property) and its value under specific tax-free award programs.

There Is a Limitation of $25 Per Donee on the Deduction