Leave-based Donation Program Related to the 2023 Hawaii Wildfires

In response to the wildfires in Maui in late August, the IRS has allowed employers to use leave-based programs to benefit victims of this event. Employees who donate their unused vacation, sick, and personal days to their employer’s program won’t be taxed on their donations as long as the employer makes a contribution to an organization benefiting victims of the Hawaii wildfires before January 1, 2024. The donations are not reported as compensation on employees’ W-2s. Employers can claim a charitable contribution deduction; employees cannot claim a deduction for the value of their foregone leave. #IdeaoftheDay