Treasury, IRS Announce Special Relief To Encourage Leave-Donation Programs For Victims Of Hurricane Sandy

 

In Notice 2012-69, the Treasury Department and the Internal Revenue Service have announced special relief intended to support leave-based donation programs to aid victims who have suffered from the destruction caused by Hurricane Sandy.

Under these programs, employees may donate their vacation, sick, or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy.

Employees can forgo leave in exchange for employer cash payments made before Jan. 1, 2014. Under this special relief, the donated leave will not be included in the income or wages of the employees. Employers will be permitted to deduct the amount of the cash payment.

These payments need not be included on an employee’s Form W-2. Also, electing employees may not claim a charitable contribution deduction under Code Sec. 170 with respect to the value of the forgone leave excluded from compensation.

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