Disaster Relief: Employers May Provide Tax-Free Relief to Employees Hit by Storm, Attorney Says
Bloomberg BNA Pension & Benefits Daily
Ruth Wimer said that Internal Revenue Code Section 139 provides, in the case of a presidentially declared disaster, that an employer can offer cash or benefits to assist employees. The payments are exempt from federal income tax and employment taxes, no substantiation is required from the employees, and the employer is able to deduct the payments, Ms. Wimer noted. She added that in considering whether to provide disaster relief for employees in a designated area, employers should consider who will be covered under the program and the period of coverage.