The devastating Maui wildfires have left a trail of destruction, impacting countless lives and communities. In the face of this tragedy, the Internal Revenue Service (IRS) has stepped up to provide relief, offering a unique opportunity for individuals to contribute to Maui Wildfire Relief through leave-based donations.
What are Leave-Based Donations?
Leave-based donations, also known as “salary sacrifice” or “paid time off (PTO) donations,” allow employees to forgo their unused and paid vacation time, sick leave, and personal leave time for cash payments that their employer will donate to qualified charitable organizations.
How do Leave-Based Donations Work?
If your employer is participating in the Maui Wildfire Relief leave-based donation program, you can voluntarily relinquish any unused and paid vacation time, sick leave, and personal leave. Your employer will then convert this unused time into a cash payment, which they will donate to a qualified charitable organization providing relief to victims of the Maui wildfires.
Benefits of Leave-Based Donations
Leave-based donations offer several benefits to both employees and employers:
- Tax Advantages: For employees, leave-based donations are considered non-taxable income, meaning you won’t have to pay taxes on the value of the donated time. Additionally, employers can deduct the donated amount as a charitable contribution under IRC Sec 162 or a business expense under IRC 170.
- Meaningful Impact: Leave-based donations provide direct financial support to organizations actively assisting those affected by the Maui wildfires, enabling them to provide essential relief services.
- Employer Savings: Employers benefit by not having to pay payroll taxes on the cash equivalent of the donated time, resulting in cost savings.
Eligibility and Timeline
The Maui Wildfire Relief leave-based donation program is open to all employees who work for employers participating in the program. The program is currently in effect and will remain active until January 1, 2025, providing ample time for individuals to contribute their unused leave time.
Taking Action and Further Inquiries
If you are interested in participating in the Maui Wildfire Relief leave-based donation program, follow these steps:
- Contact your employer: Inquire whether your employer is participating in the leave-based donation program. If not, bring the program to their attention and encourage them to participate.
- Review employer policies: If your employer participates, carefully review their specific policies and procedures for leave-based donations.
- Initiate the donation process: Once you understand your employer’s policies, follow the necessary steps to initiate the donation process.
Supporting Maui Wildfire Relief
If your employer is unaware of this program, refer them to IRS Notice 2023-69 for further details. If you are an employee or employer and have questions related to donating leave time for Maui relief efforts or other charitable contributions, please contact this office.
We encourage everyone to consider participating in this meaningful program and making a positive impact on the lives of those affected by the Maui wildfires. Together, we can help Maui recover and rebuild stronger than before.