Giving Gifts & Awards

A gift, prize, or award may be given to a person in two different ways:

  • Cash payment (e.g., student awards and gift cards)
  • Non-cash item ( e.g., merchandise valued at $25 or above)

There are important tax and/or financial aid implications for guests, students, faculty, and staff receiving a gift/award from the university. Please discuss any gifts/awards with Ross Finance.

Faculty and staff recipients

  • Departments must assess whether the award, gift, or prize being given to a faculty or staff member is taxable, by referencing the Policy on Taxation of Gifts, Prizes and Awards. If it is taxable, payment must either be made through payroll or PeoplePay, to ensure that tax is withheld and the payment is included in the employee’s Form W-2 in the calendar year in which it is received.

Student recipients

  • Awards relating to a student’s academic pursuit or achievements must be reported to the Office of Financial Aid (see SPG 601.30). All other awards, gifts, and prizes received by students are treated the same as staff recipients (if the student is also an employee) or as non-university recipients (if the student is not an employee).
  • Gifts, awards, or prizes of any value given to students may affect their financial aid package. Please have students contact the OFA to see if the gift will affect their financial aid package.
    • Any international student or guest student (non-resident alien) who does not have a tax agreement on file with payroll will be taxed 14% on any funds they receive.
    • Any award given to a non-U.S. citizen is taxed at 34.25% (30% Federal and 4.25% Michigan). Exception: Awards given to non-U.S. citizens who did not enter the U.S. are not taxed.

Non-UM-affiliated recipients

  • The university is not required to withhold income tax on gifts and prizes given to individuals who are not affiliated with the U-M. However, if an individual receives $600 in gifts and prizes from the university in aggregate throughout the calendar year, the university will issue the recipient a 1099, and they will pay taxes on the gifts/prizes when filing their tax return.