Which of the following generally applies to employee achievement awards?

Employee achievement awards are typically excluded from an employee's income under certain qualifying criteria defined by the Internal Revenue Code. This exclusion applies when the awards are not extravagant and are given for length of service or safety achievements, fulfilling specific requirements. By meeting these criteria, the awards, whether in cash or tangible property, do not constitute taxable income for the employee, thereby providing a tax benefit for both the employer and employee.

The other options do not align with the tax treatment of achievement awards. Regular income inclusion would imply that all forms of compensation are taxable, which overlooks the specific circumstances under which achievement awards can be excluded. Taxing at a special rate would not apply since these awards typically follow standard tax treatment unless they fall outside typical exclusions, which is not common. Lastly, achievement awards are not limited to cash; they can also be non-cash items like framed plaques, which further illustrates the reasons behind the correct stance on income exclusion based on specific criteria.