The Internal Revenue Service today provided guidance for employers whose employees forgo sick, vacation or personal leave to aid victims of the wildfires that began in parts of Hawaii on Aug. 8, 2023.
Notice 2023-69PDF provides that cash payments employers make to charitable organizations during 2023 and 2024 providing relief to victims of the wildfires in Hawaii in exchange for sick, vacation or personal leave which their employees forgo will not be treated as compensation. Similarly, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer.
Employers, however, may deduct these cash payments as a business expense or as a charitable contribution deduction if the employer otherwise meets the respective requirements of the applicable sections of the Internal Revenue Code.