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September 09, 2005
Employees Can Donate Leave for Victims of Hurricane Katrina

The Department of the Treasury and Internal Revenue Service have announced a program for employees to donate leave in exchange for employer cash payments made before January 1, 2007, to qualified tax-exempt organizations providing relief for Hurricane Katrina victims.

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Under the IRS program, employees do not have to include the donated leave in their income, and employers will be permitted to deduct the amount of the cash payment.

The program aims to encourage leave-based donation to aid victims who have suffered from the extraordinary destruction caused by Hurricane Katrina. Under the program, employees donate their vacation, sick, or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the victims of Hurricane Katrina.

Cash payments an employer makes to relief organizations in exchange for vacation, sick, or personal leave that its employees elect to forgo may be excluded from employees' gross income or wages if the payments are:

  • Made to the § 170(c) organizations for the relief of victims of Hurricane Katrina; and
  • Paid to the § 170(c) organizations before January 1, 2007.

The IRS offered a similar program following the attacks of September 11, 2001.

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