In response to the need to provide relief to victims of COVID-19, employers may have adopted or may adopt a leave-based donation program to enable employees to forgo vacation, sick and personal leave in exchange for cash payments that the employer makes to charitable organizations. The IRS has confirmed that employees aren’t taxed on what they forgo (amounts are not include on their W-2s) and the employer can take a charitable contribution deduction as long as the donation is made before January 1, 2021.
Alert: Follow coronavirus-related federal tax changes for your business through the IRS.
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