University Community (faculty, staff and students)
SUBJECT (R*)
EFFECTIVE DATE (R)
PROCEDURE NUMBER
USE OF REWARDS/LOYALTY PROGRAM BENEFITS
PROCEDURE STATEMENT (R)
The University participates in various rewards or other loyalty programs as a normal part of its business operations. The
University may receive points redeemable for merchandise or other gifts through its participation in these programs (e.g.,
complimentary airline tickets, office products, etc.) Any items received from program participation will be allocated on
an annual basis as follows:
1.
as:
Airline and HP reward points will first be reserved for major university wide recurring events and initiatives such
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MMC Holiday Party
BBC Holiday Party
Children’s Holiday Party
Alumni Association
United Way
HR Student Employee Awards
HR Employee Picnic
FIU Service & Recognition Awards
2.
A portion of the airline reward points and the remaining balance of HP reward points will be reserved and will
remain with the Office of Business Services for the development of current business operations that generate revenues for
the general use and improvement of university services and venues.
3.
The remaining balance of airline reward points will be provided to the Office of the Provost for official faculty
and student travel. Reward points can subsequently be redeemed for travel, etc. through the Office of Business Services.
All reward points will be allocated in January of each year and must be redeemed by the recipients by December of the
same calendar year. Any rewards points unused as of December 31st will be reallocated back to the Office of Business
Services for distribution the following year in accordance with this procedure.
REASON FOR PROCEDURE (O*)
This procedure is designed to provide guidance to the University community regarding the use of rewards points received
through the University’s participation in a rewards program or other loyalty program. The intent of this procedure is to
assure that rewards points received will support programs consistent with the mission of the University.
RELATED INFORMATION (O*)
The university restricts the purchase of desk top printers for use within FIU. This restriction also applies to the
acquisition of desk top printers with rewards points.
Taxation
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Prizes and Awards for Employees:
Points redeemable for merchandise, or valuation for frequent flyer miles, may translate into Prizes or Awards for Federal
Income Tax purposes. Prizes and Awards to employees are generally included in gross income and subject to payroll
taxes, regardless of the amount or fair market value of the property. The University recognizes this income to employees
when the points are granted. However, if an employee refuses to accept the prize, the fair market value is not included in
the employee’s gross income.
NOTE: Under Internal Revenue Code Section 74(c) the transfer of the value of a tangible personal property awarded for
length of service or safety can be excluded from gross income if the cost for all other achievement awards to such
employee does not exceed $400 during the taxable year.
Prizes and Awards for Students:
(1) Scholarships or Fellowships:
Prizes and awards in this category include those which the grantor specifically intends to be used by the grantee
to defray the expenses of study or research and are not compensation as they do not include a service component.
Prizes in this category should be treated like any other non-qualified scholarship or fellowship. Non-qualified
scholarships or fellowships are included in gross income and may be subject to federal income tax withholding.
U.S. Citizens and permanent residents: The University does not have any withholding or reporting
requirement and it is the recipient’s responsibility to report this income.
Non-U.S. Citizen and non-resident aliens: The University is required to report the value of these awards
and withhold the appropriate federal income taxes.
(2) All other prizes:
Prizes in this category usually involve a payment in the nature of an award or recognition for some sort of special
achievement or skill, or represent an award won in some sort of contest (e.g., prize paid for winning a piano
competition, prize won in a door prize raffle, etc.).
U.S. Citizens and permanent residents: If the Fair Market Value of the Prize awarded to a U.S. individual
during the tax year is less than $600, it is not subject to 1099 reporting.
Non-U.S. Citizen and non-resident aliens: Prizes and Awards granted to nonresident aliens are usually
reportable on form 1042-S regardless of the amount and may be subject to the 30% withholding tax rate
under Section 1441 of the Internal Revenue Code.
Prizes and Awards for Other Individuals (Non-Employees and Non-Students):
Prizes in this category usually involve a payment in the nature of an award won in some sort of contest (e.g., prize won in
a door prize raffle, etc.).
U.S. Citizens and permanent residents: If the Fair Market Value of the Prize awarded to a U.S. individual
during the tax year is less than $600, it is not subject to 1099 reporting.
Non-U.S. Citizen and non-resident aliens: Prizes and Awards granted to non-US Citizens are usually
reportable on form 1042-S regardless of the amount and may be subject to the 30% withholding tax rate
under Section 1441 of the Internal Revenue Code.
University Travel
Frequent flyer mileage points used exclusively for business travel are not subject to tax reporting/withholding by the
individual employee or department.
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DEFINITION (R)
1. Current Reward Programs:
a. Hewlett Packard (HP) Purchase Edge – PurchaseEdge is a rewards program from HP. Members earn points
based on the dollars they spend on qualifying Original HP printing supplies, such as HP LaserJet and inkjet
cartridges. The points can be redeemed for more than 300 of the latest HP products, such as printers, scanners
and PDAs.
b. American Airlines Travel Rewards - The Business ExtrAA program is a travel award and incentive program
that allows the university to earn points for travel on American Airlines®, American Eagle®, and
AmericanConnection®, which can then be redeemed for additional flight coupons.
c. Delta Travel Rewards - The Delta SkyBonus® program is a travel award and incentive program that allows
the university to earn points for travel on Delta airlines, which can then be redeemed for travel rewards,
including flights, upgrades, Medallion® status and Delta Sky Club™ passes.
d. United Travel Rewards - United PerksPlus is a travel award and incentive program that allows the university
to earn points for travel on United, United Express® and Lufthansa airlines, which can then be redeemed for
travel rewards, including flights, upgrades, One Year MileagePlus® Premier Silver or Gold Status and United
Club® Membership or passes.
The Office of Business Services may participate in additional reward programs in the future as such other
programs become available.
2. A “scholarship” or “fellowship” is any amount paid to an individual “for the purpose of aiding his study or research,”
and which does not represent compensation for personal services.
RESPONSIBILITIES (O)
Office of Business Services is responsible for the administration of rewards/loyalty programs and related benefits,
including rewards points. The Office of Business Services will manage the dissemination of points to the university
departments for award.
University department awarding the reward points are responsible for notifying payroll if recipient is an employee and
responsible for preparing/submitting all required IRS forms (Form W-9 or Form W-8 BEN) for non-employees. Also
responsible for collecting all applicable taxes, depositing into the correct University account, and providing supporting
documentation to the office of Business Services and office of the Controller on a timely basis. Reward/Loyalty points
may be withheld until all required documentation is provided.
Office of the Controller – Responsible for ensuring that the taxes collected by the University are reported and remitted to
the IRS by the appropriate due date and providing guidance related to withholding of taxes.
Any department which fails to collect the required IRS forms or fails to withhold and remit the appropriate federal
income tax due to the IRS, shall be required to pay from the department’s funds any amounts due (taxes, penalties,
interest, fees and legal expenses) regardless of whether the failure to report is discovered by a University self-audit or an
IRS audit.
The recipient of any award or prize for travel (airline miles) is responsible for making his/her own flight arrangements
with the respective airline carrier. Further, any individual undertaking travel on behalf of the University must abide by all
FIU travel-related policies (see, policies.fiu.edu) and the Office of the Controller, Travel & Other Expenses Manual (see,
http://finance.fiu.edu/controller/Docs/Travel_and_Other_Expenses_Manual.pdf).
HISTORY (R*)
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RESPONSIBLE UNIVERSITY DIVISION/DEPARTMENT (R*)
Division of Finance and Administration
Florida International University
The University Policies and Procedures Library are
updated regularly. In order to ensure a printed copy of
this document is current, please access it online at
http://policies.fiu.edu/.
RESPONSIBLE ADMINISTRATIVE OVERSIGHT (R*)
Office of Business Services
11200 S.W. 8th Street, OBS 124
Miami, Florida 33199
Telephone Number: (305) 348-2187
For any questions or comments, the “Document
Details” view for this procedure online provides
complete contact information.
FORMS/ONLINE PROCESSES (O)
Link(s) to the above referenced Forms available in the "Document Details" Section of the online version of this procedure document.
*R = Required
*O = Optional