IRS Confirms Major Disaster Leave-Sharing Program Use for COVID-19 Pandemic

On August 3, 2020, the IRS posted a short set of frequently asked questions for leave-sharing programs which confirm that major disaster leave-sharing programs under IRS Notice 2006-59 can be used for employees who have been adversely affected by the COVID-19 pandemic.  As a reminder, major disaster leave-sharing programs under Notice 2006-59 permit employees to donate paid leave to their co-workers who are adversely affected by a “major disaster.”  When properly structured, the donated leave is excluded from the gross income of the donor and included in the gross income of the recipient.  President Trump has declared major disasters due to COVID-19 for all 50 states and the District of Columbia. Read More ›

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IRS Approves Additional Leave-Based Donation Programs for COVID-19 Relief

We previously posted about two leave-sharing programs available to employers during the COVID-19 pandemic: major disaster leave-sharing programs and medical emergency leave-sharing programs.  These leave-sharing programs may allow employees to donate paid leave to co-workers affected by COVID-19.  When properly structured under Internal Revenue Service (“IRS”) guidance, the donated leave is excluded from the gross income of the donor employee. 

On June 11, 2020, the IRS published Notice 2020-46, which permits employers to establish an additional type of leave-sharing program: a leave-based donation program under which employees can donate vacation, sick, or personal leave in exchange for cash payments that the employer makes to a charitable organization described in Internal Revenue Code (the “Code”) Section 170(c) (a “Section 170(c) Organization”). Read More ›

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