Legislative Update: IRS Announces A Program for Donation of Value of Vacation, Sick Time or Other Paid Time-off for Relief of Victims of Hurricane or Tropical Storm Harvey

  Under IRS Notice 2017-48, issued on September 5, employers may contribute the value of the Paid Time Off (PTO) contributed by their employees as Harvey relief to a non-profit organization and will be entitled to a deduction that may be treated as a business expense, rather than a charitable contribution, as long as the donations are specifically for the relief of Harvey victims and are made by January 1, 2019. The employees who make the donations will not be entitled to take charitable deductions, but will not be subject to income or social security taxes on the amounts donated. This differs from a traditional leave donation program, under which employees can donate a portion of their PTO to be used in kind by employees who were affected by a natural disaster such as Harvey. The temporary relief announced by the IRS allows the value of the donated PTO to be converted into cash charitable contributions, making it more widely useful, particularly in the case of employers who do not have employees located in the area affected by Harvey. Read Printable PDF