Under these programs, employees elect to forgo vacation, sick, or personal leave in exchange for cash payments the employer will send to qualifying organizations aiding victims of Hurricane Sandy. The payments must be made to qualifying § 170(c) organizations for the relief of victims of Hurricane Sandy and these donations must be paid before January 1, 2014. Employees may not claim these amounts as charitable contributions on their tax returns because these donated amounts will not be included in their W-2 earnings. Cash payments to which this guidance applies need not be included in Box 1, 3 (if applicable), or 5 of an employee’s Form W-2.
A possible benefit to employers adopting this program is that employer taxes don’t have to be paid when the leave time is used this way.
Employers have two options for reducing the employee’s accrual balance:
- Manually reduce the accrual balance on the employee’s Accruals tab.
- Use a memo earning code to reduce the employee’s accrual balance and reflect the donated time in the pay history (without adding the totals to the taxable earnings). *Please contact your Client Account Manager if you would like to request that this memo earning code be added to your Company Setup.
Resources for finding qualifying § 170(c) organizations aiding victims of Hurricane Sandy:
Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.