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Can Government Agencies Reimburse Employees Who Used Rewards Points or Gift Cards? Tax Implications Explained
June 18, 2026
Q. I work for a local government agency in the Finance/Accounts Payable department. We have employees who travel or purchase supplies for their departments and turn in receipts for reimbursement.There have been instances where the items were paid by gift card or by loyalty points. Should we reimburse employees for items they did not pay "cash" for? Are there any tax implications to the employee for this? Any IRS rules regarding this? Or possibly any Iowa State codes or regulations?
A.
(Answered…
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