As they have done before in the wake of disasters, including Hurricane Katrina and Superstorm Sandy, the Internal Revenue Service is providing special relief that allows employees to donate their unused paid vacation, sick leave, and personal leave time to recent hurricane relief efforts.
Here is how it works: if your employer is participating, you can relinquish any unused and paid vacation time, sick leave and personal leave for cash payments which your employer will give to qualified hurricane relief charitable organizations. The cash payment will not be treated as wages to you and your employer can deduct the amount donated as a business expense. However, since the income isn’t taxable to you, you will not be allowed to claim the donation as a charitable deduction on your tax return. Even so, excluding income is often worth more as tax savings than a potential tax deduction, especially if you generally claim the standard deduction or you are subject to AGI-based limitations.
This special relief applies to all donations made before January 1, 2019, giving individuals over a year to forgo their unused paid vacation, sick and leave time and have the cash value donated to a worthy cause.
This is a great opportunity to provide sorely needed help in the aftermath of the recent hurricanes without costing you anything but time. Contact your employer to make a donation. If your employer is unaware of his program refer them to IRS Notice 2017-48 for further details.
If you have questions related to donating leave time for hurricane relief efforts or other charitable contributions, please contact us.