A recent IRS ruling could hold significant impact for EPC hurricane relief in Texas, Florida, and Puerto Rico. Under the provision of the ruling, employees who earn paid time off (PTO) can donate their vacation, sick, or personal leave in exchange for a cash payment by the employer to a charitable organization. As a registered 501(c)(3) non-profit organization, the EPC is eligible to receive these donations.
“What a great way for people to help those who are still dealing with the effects of hurricanes Harvey, Irma, and especially Maria,” said Jeff Jeremiah, EPC Stated Clerk. “I encourage our churches to inform their congregations—especially those church members who own businesses with employees, or are in HR or other roles. This gives people who may not have the resources to donate money directly a method help in a tangible way.”
The PTO donation is not included in the income or wages of the employee, and therefore not subject to income or payroll tax withholding. However, the employee cannot claim a charitable contribution deduction for the value of the donated PTO.
The provision also allows a for-profit employer to deduct the payments it makes to charities in connection with the donated PTO as a business expense, resulting in the payments not being subject to the charitable contribution deduction limits normally applicable to charitable contributions.
Click here for more information from the IRS website.