A coalition of business and charitable associations and the Internal Revenue Service
have joined together to educate the nation's employers about a leave-donation
program benefiting Hurricane Katrina victims.
The leave-donation program offers favorable tax treatment for employees who
donate annual, sick, or personal leave back to their employer. The employer
converts the leave into cash and makes a contribution to a qualified charity
supporting Katrina relief and recovery efforts. The employee pays no taxes on
the value of the leave, and the employer may deduct the amount as either a charitable
donation or as a business expense.
"Everybody wins under this program," says IRS Commissioner Mark W.
Everson. "Employees can give without paying cash. Companies get the tax
deduction. And the money gets to people in need."
The business associations will share information about the leave-donation program
to all their members. Among those joining the outreach efforts are:
- U.S. Chamber of Commerce
- Society for Human Resource Management
- Small Business Legislative Council
- National Manufacturer's Association
- American Hotel and Lodging Association
- Associated General Contractors
- American Dental Association
- American Payroll Association
- American Trucking Association
- Women Impacting Public Policy
- National Women's Business Council
- Independent Community Bankers of America
- National Small Business Association
- United States Pan-Asian American Chamber of Commerce
The IRS says a leave-donation program can be adopted and administered easily.
Employers must follow certain guidelines, but no IRS approval is required and
there are no special reporting requirements. This program will extend through
the end of 2006. People will have a chance to donate even if they've used their
vacation time for this year.
The cash contribution by the employer must be made to a qualified tax-exempt
organization, dedicated to Hurricane Katrina relief and paid to the organization
by December 31, 2006.
Read about the Leave
Donation Program at website of the IRS.