EDD Announces Conformity to IRS on Employee Donations of Leave Credits to Victims of Hurricane Katrina

On September 8, 2005, the Internal Revenue Service (IRS) issued Notice 2005-68 regarding the “Treatment of Certain Amounts Paid to Section 170(c) Organizations under Certain Employer Leave-Based Donation Programs.”

Under these leave-based donation programs, employees donate their vacation, sick, or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the victims of Hurricane Katrina. Employees will not be able to deduct the donated leave; however, they do not have to include it in income.

Employers will be able to make deductible cash contributions to qualified organizations (Section 170[c] Organizations), in the amount of donated leave until the end of 2006.

For California employment tax purposes, the donated leave credits are not subject wages for UI/DI and not subject to PIT withholding or considered PIT Wages and should not be included on the Form W-2.

If you should have any additional questions regarding this Notice and its application to California employment taxes, please contact the EDD Taxpayer Assistance Center at 1-888-745-3886.

America's Service Locator - One-Stop Career Center information.

US Department of Labor - Provides information on other State agencies.

Federal Emergency Management Agency (FEMA) - Information on applying for disaster assistance such as temporary housing assistance, disaster loans, and other needs. The site also includes news, assistance, and resources about recent disasters and emergencies. For more information, contact 1-800-621-FEMA (3362) or TTY 1-800-462-7585.

GovBenefits.gov - Information on disaster relief programs available to individuals and businesses.

Red Cross - News and information about available shelter, supplies, etc. If you need immediate relief or assistance, contact 1-800-438-4636.

General Services Administration - for additional links to Web sites with information for hurricane victims.