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.