IRS Extends Leave Donation Program to Irma Victims

September 20, 2017


We recently wrote about IRS Notice 2017-48, giving employees the option to designate part of their vacation or personal time off leave at their employer to Internal Revenue Code Section 170(c), charitable organizations to aid victims of Hurricane and Tropical Storm Harvey.  Now, the IRS has provided guidance (IRS Notice 2017-52) that extends the same leave-based donation program to aid victims of Hurricane and Tropical Storm Irma.

The employee may forego this paid vacation, leave, or sick pay by instead instructing the employer to make contributions to charitable organizations that provide relief for the victims of Hurricane Harvey, before January 1, 2019.

There are no payroll taxes, unemployment taxes, withholding, or unemployment charges with respect to any of this amount. The employee will NOT receive a charitable contribution for this, but is merely foregoing the revenue. The employer will be able to deduct this expense, not as a charitable contribution, but as a regular business expense. As a result, the employer does not have to worry about charitable contribution limits.

Some employer organizations have a "use it or lose it" policy on these types of leave. Therefore, some employees might be inclined to look at situations where they could be wasting leave opportunities and instead choose to exchange their leave for aid to these types of victims.

Employees: Check with your employer to see if they will cooperate with the IRS guidelines and allow you to participate in this program.

Employers: If you have questions regarding implementation or tax consequences, be sure to consult with your CPA.

We hope you find this information valuable. If you have any questions about this IRS Notice, please contact us.

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