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Hurricane Katrina Relief Leave Donation Program

The IRS is encouraging employers to establish Hurricane Katrina Relief leave donation programs and is providing special tax treatment to support such programs. Under a leave donation program, employees can elect to forgo their vacation, sick or personal leave in exchange for the employer making cash payments to a qualified tax-exempt organization providing relief for victims of Hurricane Katrina.

What Does It Mean for You?

Benefit for Employees:
These programs provide employees with a way to help Hurricane Katrina victims without needing to make a cash contribution. The benefit is available regardless of whether an employee normally takes the standard deduction or itemizes. For employees who have extra vacation, sick or personal leave balances or who just simply want to provide more to the Hurricane Katrina relief effort, a leave program makes it easier for them to help the Hurricane Katrina victims go about the difficult task of rebuilding their lives.

Benefits to Employers:
The employer may take either a charitable or business deduction for the amount sent to the charity. The amounts contributed are not subject to employment taxes. Employers must follow the guidelines below and in the FAQs but no IRS approval is required. A leave donation program can be adopted and administered easily.

Program Guidelines:
The cash contribution by the employer must be:

  • Made to a qualified tax-exempt organization;
  • Dedicated to Hurricane Katrina relief;
  • Paid to the organization by Dec. 31, 2006

Business Associations Promote Leave-Donation Program

Other Helpful Information:

Page Last Reviewed or Updated: 18-Dec-2014