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How is an exercise equipment package taxed for employees as well as the company?

There will be a contest where there is a prize of exercise equipment and package for membership etc. The total value is $3500 per package and 6 will be given away. How is something like that taxed for the employee as well as the the taxation to the employer?

Answers

Shana Wild
Title: Controller Consultant
Company: Tier One Services, LLC
(Controller Consultant, Tier One Services, LLC) |

Hello!

Monetary prizes, awards, bonuses and gift certificates, including
achievement awards, are generally considered taxable compensation
subject to federal and state income tax withholding, unemployment tax,
and FICA taxes.

The IRS guidance can be found at: https://www.irs.gov/publications/p525#en_US_2017_publink1000229090

Please let me know if i can be of further help.

Shana Wild
Title: Controller Consultant
Company: Tier One Services, LLC
(Controller Consultant, Tier One Services, LLC) |

Hello! Just reaching out to see if the information was helpful and if you have any additional questions?

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