If you and your employees are looking for valuable ways to donate to the Hurricane Katrina relief efforts, a new program launched by the Department of the Treasury and the Internal Revenue Service may help you out. In particular, the agencies have announced a program for employees to donate leave in exchange for employer cash payments made before January 1, 2007, to certain organizations providing relief for Hurricane Katrina victims. The IRS offered a similar program following the 9/11 terrorist attacks.
Under the new program, employees can donate their vacation, sick, or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the hurricane victims. Employees don’t have to include the value of the donated leave in their income, and employers can take a business expenses tax deduction for the amount of the cash payment.
To qualify under this program, the employer’s cash payments must be: 1) made to IRC section 170(c) organizations for the relief of victims of Hurricane Katrina; and 2) paid to such organizations before January 1, 2007.
Our HR Management & Compliance Report: How To Comply with California and Federal Leave Laws, covers everything you need to know to stay in compliance with both state and federal law in one of the trickiest areas of compliance for even the most experienced HR professional. Learn the rules for pregnancy and parental leaves, medical exams and certifications, intermittent leaves, required notices, and more.
Additional Resource:
Internal Revenue Service Notice 2005-68