Level 20
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Retirement tax questions

Length-of-Service Achievement Awards

 

An award made for length-of-service award may be excludable. However, it does not
qualify if either of the following applies:


The employee received the award during his or her first 5 years of
employment.

 

The employee received another length-of-service award (other than one of very
small value) during the same year or in any of the prior 4 years.


Awards other than for safety or for length-of-service are always nonqualified awards,
unless they are qualifying de minimis fringe benefits.

 

The maximum amount of excludable awards to a single employee during a calendar
year is limited to:
$400 for awards made under a nonqualified plan; or
$1600 in total for awards made under both qualified and nonqualified plans