Employer-sponsored assistance: Washington floods

Employer assistance

FEMA’s disaster declaration activates section 139, which excludes qualified disaster relief payments from gross income. In addition, it permits employer-sponsored private foundations to provide assistance to related employees without violating the self-dealing rules. Moreover, it excepts certain donor advised funds from that definition, permitting advisors to recommend qualified disaster relief distributions to individuals.

Employers may also establish a leave-based charitable donation program under which employees can forgo leave and not recognize it in income, in exchange for employers making a donation to a section 170(c) charitable organization. The IRS must specifically authorize this relief for a disaster. As of the date of this publication, the IRS has not authorized such a program for the Washington floods.

Read RSM US’ How employers can assist employees impacted by major disasters and Qualified disaster relief through charitable organizations for more information.