employee achievement award
(3) Definitions For purposes of this subsection— (A) Employee achievement award (i) In general The term “employee achievement award” means an item of tangible personal property which is— (I) transferred by an employer to an employee for length of service achievement or safety achievement, (II) awarded as part of a meaningful presentation, and (III) awarded under conditions and circumstances that do not create a significant likelihood of the payment of disguised compensation. (ii) Tangible personal property For purposes of clause (i), the term “tangible personal property” shall not include— (I) cash, cash equivalents, gift cards, gift coupons, or gift certificates (other than arrangements conferring only the right to select and receive tangible personal property from a limited array of such items pre-selected or pre-approved by the employer), or (II) vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, other securities, and other similar items. (B) Qualified plan award (i) In general The term “qualified plan award” means an employee achievement award awarded as part of an established written plan or program of the taxpayer which does not discriminate in favor of highly compensated employees (within the meaning of section 414(q) ) as to eligibility or benefits. (ii) Limitation An employee achievement award shall not be treated as a qualified plan award for any taxable year if the average cost of all employee achievement awards which are provided by the employer during the year, and which would be qualified plan awards but for this subparagraph, exceeds $400. For purposes of the preceding sentence, average cost shall be determined by including the entire cost of qualified plan awards, without taking into account employee achievement awards of nominal value.