Employees: Trade Days Off For Cash Donations | AccountingWEB

Employees: Trade Days Off For Cash Donations

The IRS has announced that programs allowing workers to swap unused leave time for financial contributions from their employer for terrorism relief do not constitute gross wages or income of an employee.

For workers, such arrangements will be a non-issue on tax returns. The IRS says it won't view the programs as giving workers any taxable benefit from their employer. Nor will IRS permit the worker to deduct the amount donated by the employer.

This announcement clears the way for cash-strapped and other employees to help out in relief efforts, and gives employers an opportunity to contribute to a worthy cause while claiming a charitable contribution and eliminating a long term liability of unused leave time.

The IRS has indicated that this ruling is valid for payments made to charitable organizations prior to January 1, 2003, at which time it plans on issuing a permanent ruling.

The IRS is requesting comments on the taxation of leave-based donation programs. Comments may be submitted on or before February 1, 2002, to Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20224, Attn: CC:ITA:RU (Notice 2001-69), Room 5226. Submissions may also be sent electronically via the Internet to: notice.comments@m1.irscounsel.treas.gov.

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