The IRS has issued two items of guidance in response to the need for charitable and other relief due to the Ebola outbreak in Guinea, Liberia and Sierra Leone. One piece of guidance provides special relief intended
to support leave-based donation programs to aid victims who have suﬀered from the Ebola virus outbreak in those countries. The other designates the Ebola outbreak in those countries as a qualiﬁed disaster for federal tax purposes.
Under the leave-based donation guidance, employees may donate their vacation, sick or personal leave in exchange for employer cash payments made to qualiﬁed tax-exempt organizations providing relief for the victims of the Ebola outbreak in Guinea, Liberia or Sierra Leone. Employees can forgo leave in exchange for employer cash payments made before January 1, 2016. Under this special relief, the donated leave will not be included in the income or wages of the employees. Employers will be permitted to deduct the amount of the cash payment.
The IRS has alerted employers and other taxpayers that, because the Ebola outbreak is designated as a qualiﬁed disaster for federal tax purposes, qualiﬁed disaster relief payments made to individuals by their employers or any person can be excluded from those individuals’ taxable income. Qualiﬁed disaster relief payments include amounts to cover necessary personal, family, living or funeral expenses that were not covered by insurance. They also include expenses to repair or rehabilitate personal residences or repair or replace the contents to the extent that they were not covered by insurance. Also, the designation of the Ebola outbreak as a qualiﬁed disaster means that employer-sponsored private foundations may provide disaster relief to employee-victims in areas aﬀected by the hurricane without aﬀecting their tax-exempt status.
For more information, contact Denise Howell at 228-396-2996.