The IRS has extended leave-based donation programs to victims of Hurricane Michael. These programs allow employees to forgo vacation, sick, or personal leave. In return, the employer donates to charitable organizations that provide relief for victims of the disaster.
Employee’s Income and Wages
An employer’s cash donations under a leave-based donation program are not gross income or wages for the employees who surrendered leave. However, the employer must:
- make the donations to a Code Sec. 170(c) charitable organization for the relief for victims of Hurricane Michael;
- pay the donations to the charitable organization before January 1, 2020.
- The employer does not have to report its leave-based donations on the employee’s Form W-2.
An employee may not claim a charitable contribution deduction for the value of forgone leave that is excluded from compensation and wages. The employer may deduct the cash payments as either business expenses or charitable contributions.
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