De Minimis Rule

​What is the de minimis rule?

The de minimis rule is used by the IRS to determine if a benefit provided to an employee is excluded from taxable income because the value is so small and the practice so infrequent that accounting for the value of the benefit is unreasonable or impractical. Examples of de minimis benefits include employer-provided snacks, small holiday gifts, flowers and occasional entertainment tickets. Cash or cash equivalent items such as gift cards, no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare provided to an employee working unusual or extended overtime hours. 

For more information, see Are there any tax issues we need to be aware of when we give employees a gift card or other small gift?