Cash payments for donated leave aren’t comp: IRS

Published Updated 1 Min Read

Cash payments that employers make to charitable organizations providing relief to victims of the COVID-19 pandemic in exchange for sick, vacation or personal leave that their employees forgo will not be treated as compensation, according to new guidance from the Internal Revenue Service.

At the same time, Notice 2020-46 provides that employees will not be treated as receiving the value of the leave as income, and so cannot claim a deduction for the leave that they donated to their employer.

Jeff Stimpson
Freelance writer

Jeff Stimpson is a veteran freelance journalist who previously served as editor of The Practical Accountant.


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