IRS Issues Guidance on Employer Leave-Based Donation Programs That Aid Victims of the Wildfires in Hawaii

Published September 29, 2023

The Internal Revenue Service (IRS) issued Notice 2023-69 providing 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 2023-69 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;
  • 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 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.