DC Tax Flash: Guidance Issued on Employer Leave Donations to Virus Charities

Tax Alert
06.11.2020

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.


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