When a disaster such as Hurricane Harvey strikes, people often want to help those affected by the disaster, and employers often want to help their own employees.
Employers can make certain payments, implement reimbursements, and provide other forms of assistance, so that some or all of the assistance is not treated as taxable compensation to employees, but is tax deductible for the employers.
Read a September 2017 report [PDF 70 KB] prepared by KPMG LLP: What’s News in Tax: Employers Helping Employees—Disaster Relief
The IRS today released an advance version of Notice 2017-48 that provides guidance with respect to leave-based donation programs initiated by employers to aid victims of Hurricane Harvey and Tropical Storm Harvey.
Employers may have adopted or may be considering adopting leave-based donation programs whereby employees can elect to forgo vacation, sick, or personal leave in exchange for cash payments that the employer makes to charitable organizations described in section 170(c).
Notice 2017-48 [PDF 11 KB] provides the following guidelines for income and employment tax purposes on the treatment of such cash payments made by employers under leave-based donation programs for the relief of victims of Hurricane Harvey and Tropical Storm Harvey.
Read a related IRS release (IR-2017-143).
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