Tax Applied to 2018 Recognition Points in December
Wednesday, November 21, 2018
The points you receive in the employee recognition program have value, so federal law requires us to charge a small amount of tax on the points. If you received points in 2018, the earnings section of your Dec. 21 paycheck
will include an entry coded “99 GFT CRT”.
As always, please read the line items on your pay statement carefully. You are taxed on only 65 percent of the value of points received; that equals about $10 if you received 150 points this year, for example. The amount of tax you pay on points varies because of your tax bracket and other factors. Read below for more information about recognition points and tax implications.
9 Things to Know About Recognition Points
Points have value and are a form of income. By federal law, KentuckyOne must tax you on the points you receive. Tax is applied annually in December for points received that year.
- You are taxed on only 65 percent of the value of points received.
- You are not charged sales tax when you redeem points for items in the online catalog.
- The amount of tax you pay on points varies because of your tax bracket and other factors.
- Recognition points do not expire.
- You don’t need a pile of points to buy something—you can get a movie ticket for 64 points, for example.
- Points do not compare equally to dollars. For example, a purse available for 480 points would not cost $480 at a department store.
- Shipping and handling are included when you redeem points for items. There’s no additional cost to you.
- You can check your points balance, shop the catalog or send recognition from any computer with Internet access (click here).
For more efficient administration, KentuckyOne calculates the tax once per year. If you received points during the calendar year, you will see an entry labeled “GFT CRT” in the earnings section of your last pay statement in December.
The tax is a fairly nominal amount, depending on the points you received. For example:
Points received Estimated tax
25 Less than $2
75 Less than $5
150 Less than $10
250 About $15
350 About $20
750 Less than $50
If you have questions about employee recognition points or the program itself, please contact your local HR Business Partner.