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Tax Implications of Holiday Bonuses


It’s the holiday season, which means employees in many companies may be receiving a holiday bonus! So, what are the tax implications? Per Internal Revenue Service (IRS) guidelines, all bonuses issued via check/direct deposit or in the form of gift card (cash equivalent) are considered supplemental taxable wages. Additionally, holiday bonuses are considered discretionary, and therefore do not need to be included in overtime pay calculations for non-exempt employees.

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