DC Tax Flash: Guidance Issued on Employer Leave Donations to Virus Charities
The Internal Revenue Service (IRS) today issued Notice 2020-46, which instructs that employer cash payments to coronavirus relief charities in exchange for forgone employee leave will not be considered compensation.
Likewise, the guidance holds that employees will "not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer," the IRS explains. "Employers, however, may deduct these cash payments as a business expense or as a charitable contribution deduction if the employer otherwise meets the respective requirements" of Internal Revenue Code section 162 or section 170.
The two-page text of Notice 2020-46 is posted here.
An IRS press release is posted here.
Miller & Chevalier Coronavirus Task Force
The outbreak of COVID-19 is creating significant business and legal challenges for companies throughout the world. In response to client demand, the firm has formed an interdisciplinary task force to help businesses navigate these issues.
This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.