Tax Categories

In MustardHub, a tax category is a structured label that captures the intended nature of a points-based transfer at the time it is given.

Tax categories do not calculate tax liability, determine withholding, or enforce compliance rules.

They exist to consistently record giving intent so transactions can later be reviewed, externally interpreted, and reported with clarity.

A tax category is attached to a transaction when points are distributed, not when they are redeemed. Tax categories impact:

How transactions are grouped in tax-related reports
How transaction intent is recorded in historical records
How finance and payroll teams can later review and interpret distributions

Please note: Tax categories have no impact on the following:

Wallet balances or funding mechanics
When or how points can be redeemed
Automatic tax calculations or withholding
Compliance determinations or filing outcomes
Predictive Insights or analytics

See D.4: Tax Reports for how categories appear in reporting outputs.

See D.5: Wallets, Transfers & History for transaction-level records.

Why tax categories exist in MustardHub

From a system perspective, points-based rewards are non-cash benefits. In many platforms, all such benefits are treated as uniformly taxable by default.

MustardHub takes a more granular approach.

Because the giving event occurs at distribution, the system allows Organizations to apply an intent category to that distribution at the moment it happens. This enables:

Clear differentiation between different types of recognition, rewards, and transfers
Traceability between intent, transaction records, and downstream reports
Clearer review of which transactions may later be considered includable or excludable under applicable tax frameworks

The IRS generally treats benefits as includable unless they fall into specific exclusion categories. MustardHub does not decide whether a transaction qualifies for inclusion or exclusion. It records how the Organization categorized the intent of the transfer, so that determination can be made externally.

MustardHub does not provide tax advice and does not determine tax treatment or compliance outcomes.

For conceptual and responsibility context around taxes, see D.2: Important Tax Matters.

Currently represented tax categories

MustardHub supports the following system-defined tax categories. These categories include both potentially includable and potentially excludable designations.

Unclassified
Birthday
Charitable, scientific, artistic, and similar achievements
De minimis fringes
Family or familial relationship
Holiday celebration
Length of service (work anniversary)
No-additional-cost services
Non-employment related affection, respect, and admiration
Non-employment related association member
Non-employment related gift or loyalty
Non-employment related simple recognition or appreciation
Peer recognition
Qualified employee discounts
Qualified moving expense reimbursements
Qualified transportation fringes
Safety achievements
Scholarship or fellowship grant
Welcome Aboard
Work-related bonus
Work-related compensation
Working condition fringes

Which categories may be considered includable or excludable depends on external interpretation and applicable rules.

MustardHub does not make that determination.

For guidance on includability and excludability concepts, see D.2: Important Tax Matters.

How tax categories are assigned

Tax categories are assigned at the time a reward or transfer is created, based on the feature being used.

[include screenshot: confirm points transfer modal]

Admin-selected categories

Admins can explicitly select a tax category for:

Private Transfers
The tax category is selected at the time the transfer is created.

[include screenshot: tax category selection list]

These selections define the category applied to all transactions generated by that configuration.

Some transactions use system-defined defaults and do not allow manual selection.

Recognition with points (non-templated)

Recognition sent as the company → Unclassified
Recognition sent as a Member → Peer Recognition

Default celebrations

Birthday → Birthday
Work Anniversary → Length of service (work anniversary)
Welcome Aboard → Welcome Aboard

These defaults are hardcoded to ensure consistent application of tax categories across the Workspace.

Boosts

Boosts inherit the tax category of the original post they are applied to.

For example:

If the original post is categorized as a gift, the Boost uses the same category.
If the original post is unclassified, the Boost remains unclassified.

Boosts do not introduce a new tax category of their own and do not alter the intent of the original transaction.

Tax-related settings

Admins can:

Review tax categories applied to transactions via reports and history
Configure categories on eligible features
Adjust category selection for future transactions by editing those configurations

Previously recorded transactions retain the category that was applied at the time of distribution.