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