Gift cards sent to non-employees may be considered taxable income by the IRS. Depending on the amount distributed and your specific use case, you may need to collect tax information from recipients and file tax forms.
Giftbit acts as a gift card distributor on your behalf. We help you track distributions, but we do not collect tax forms or file tax documents for you.
Understanding Your Responsibilities
Gift cards provided to non-employees, such as customers, participants, or survey respondents, may be considered taxable income by the IRS.
Starting with tax year 2026, recipients who receive $2,000 or more in a calendar year may require tax reporting. In those cases, you may need to:
Collect a W-9 from the recipient.
Issue a 1099 reporting the total value provided.
If you're unsure about your reporting obligations, consult a qualified tax professional.
📆 Key Deadlines
If reporting is required:
By January 31: Provide a copy of the 1099 to each recipient.
By January 31: File the 1099 with the IRS.
This ensures both the recipient and the IRS receive the information needed for tax reporting.
How Giftbit Can Help
Giftbit provides a Recipient Report that shows:
Who received gift cards
When they were sent
The total value received per individual email address
Many customers use this report to identify recipients who may meet reporting thresholds and support their own tax reporting process.
💡 Note: Recipient-level reporting is only available when rewards are sent directly to recipients using email addresses. If you distribute rewards using Giftbit links, Giftbit cannot track the total value received by an individual recipient. In those cases, you will need to maintain your own records and tracking processes for tax reporting purposes.
Frequently Asked Questions
Does Giftbit collect W-9s?
No. Customers are responsible for collecting W-9 forms directly from recipients.Does Giftbit file 1099s?
No. Customers are responsible for preparing and filing any required tax forms.Can Giftbit help me determine who may need a 1099?
Yes. Our Recipient Report provides recipient-level totals that can help you review distributions and identify recipients who may meet reporting thresholds.
⚠️ Disclaimer
This article is provided for informational purposes only and should not be considered tax, legal, or accounting advice.