If an employer paid amounts that are otherwise reportable on a Form LM-10 but which are subsequently repaid by the recipient within the same year, must those amounts be reported on a Form LM-10?
A59. No. Employers need not report gifts that are rejected and returned and payments that are repaid by the recipient. The same rule applies to hospitality items, such as meals, beverages, vacations, etc. The items are not reportable when reimbursement is made. The recipient must reimburse the employer for the gift, payment, or hospitality in the same fiscal year in which it was received. If the payment is made near the end of the fiscal year, however, the employer need not file a report if it is reimbursed promptly, even if the reimbursement occurs in the next fiscal year. Where timely reimbursement is not made, the payment must be reported, although the filer may note that reimbursement was made. Cash payments not promptly reimbursed must include interest, or the forgone interest will be reportable as a gift. Similarly, a gift of a car or a boat, for example, must be returned with compensation for their use at the fair market rate and any diminution in value or the forgone compensati
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