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Abstract: 

On June 11, the IRS issued Notice 2020-46, regarding the income and employment tax treatment of certain cash payments employers make under leave-based donation programs. Under a leave-based donation program, employees can elect to forgo vacation, sick, or personal leave in exchange for cash payments the employer makes to organizations described in IRC §170. This article briefly explains how Notice 2020-46 effects employers and employees providing cash payments made to an organization in exchange for vacation, sick, or personal leave an employee elects to donate. Includes a sample “Employee Leave Donation Program.”

Keywords: IRS Rules for Leave-Based Donation Programs

Affiliations:  1: Clark Hill PLC.