Employers can set up tax-advantaged leave donation programs to help facilitate cash gifts to charities providing disaster relief to the victims of Hurricane Sandy. The Internal Revenue Service on November 6, 2012, announced, "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."
This leave donation program will be in effect until December 31, 2013.
Donated vacation, sick, and personal time off "will not be included in the income or wages of the employees. Employers will be permitted to deduct the amount of the cash payment," the IRS said.
Similar tax relief was made available following Hurricane Katrina, notes Alistair Nevius at the Journal of Accountancy.
On the IRS Web site:
- Treasury and IRS Announce Special Relief to Encourage Leave Donation Programs for Victims of Hurricane Sandy (IR-2012-88)
- Treatment of Certain Amounts Paid to Section 170(c) Organizations under Certain Employer Leave-Based Donation Programs to Aid Victims of Hurricane Sandy (Notice 2012-69)