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Disaster Relief: Employer Assistance to Affected Employees May Be Taxable

If an employer provides assistance directly to employees who are in need because of a qualified disaster without going through a charitable organization, is such assistance taxable income to employees?

Amounts paid to reimburse or pay reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster, or to repair or rehabilitate a personal residence, are not subject to federal income taxation to the extent any such expense is not otherwise reimbursed, such as by insurance. An IRS guidance document provides more information.

Page Last Reviewed or Updated: 20-Mar-2014