Photo: L.A. Times, Michael Reynolds
Employees who want to help victims of Hurricane Sandy through leave donation may do so without being taxed on the monetary value of the vacation days, sick days and personal leave they donate, the IRS announced Nov. 6.
In a leave donation program, employees forgo vacation, sick or personal leave and return it to their employer. In exchange, the employer converts the leave donations into monetary contributions that it then gives to charitable organizations’ relief funds that provide assistance to those in need.
Ordinarily, significant tax restrictions apply to such employer-sponsored programs. But at times of especially severe hardship —past examples include the Sept. 11, 2001 terrorist attacks and in the aftermath of Hurricane Katrina — the IRS has made exceptions to these limitations and increased the tax advantages for those participating in and operating a leave donation program.
An IRS press release stated, “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.” Employers must make the cash payments to the charities before Jan. 1, 2014 in order for the relief to apply.
Details of the relief are in IRS Notice 2012-69. More information about other relief actions the IRS has taken in the wake of Hurricane Sandy is available on the IRS website.