HR Management & Compliance

Tax Treatment Of Donated Leave

According to a new IRS
notice, leave donated by an employee to a qualified employer-sponsored leave bank
following a major disaster is not income to the donating employee if the leave
received by an affected employee is treated as wages for purposes of FICA, FUTA,
and income tax withholding. The notice also spells out these requirements for a
qualified major disaster leave-sharing plan: 1) a donor can’t designate a specific
person to receive the leave; 2) recipients must use the donated leave for time
away from work due to severe hardship the disaster caused; 3) leave must be
donated, and used, within a certain timeframe; 4) recipients can’t convert
donated leave into cash; and 5) leave donated in the aftermath of a disaster
can only be used for employees affected by that disaster. IRS Notice 2006-59 is
online at


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.