Tax on employee achievement awards

One can reduce the tax in case of an employee achievement award if and only if the employer deducts the employee achievement awards on its tax returns. Not only that, there are some other requirements which are to be fulfilled in order to get excluded from this tax. The IRS has mentioned the requirements clearly. According to their rules the reduction will be made as a part of meaningful presentation only. Also they have mentioned a limit above which such deductions will not be granted. Only those amounts which come under this limit will be considered for tax reduction if other requirements are met. It can be avoided from tax if it is given in the form of gift certificates rather than in the form of cash. It will be excluded if the amount is given for the service of the person towards the company for long time. Such achievement awards can be categorised in to two plans basically. They are non tax qualified plan and tax qualified plan. In the case of the tax qualified plan tax will be deducted for that tax year. But in the case of non taxable qualified plan they are eligible for tax exemption.