As employers, we know that the Covid-19 pandemic will have an unprecedented impact on our employees. From loss of childcare due to school closures, reduction in family income because of a spouse’s layoffs, or the added expense of caring for medically fragile loved ones, our workforces are likely to be under extreme financial pressure.

Now you have a way to help: On Friday, March 13, 2020, the Executive Branch of the US Government declared the COVID-16 pandemic a national emergency. Among other things, the declaration officially recognizes the pandemic as a “qualified disaster” as defined by Internal Revenue Code Section 139. This section of the code also provides that qualified disaster relief payments from any source, including employers, which reimburse or pay individuals’ specified expenses in connection with qualified disasters are not taxable as income and are not subject to employment taxes or withholding.

As defined by the IRS, qualified disaster relief payments include payments received for reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster.

This means you do not have to rely on an existing employee hardship fund. The national disaster designation changes the rules about who can be considered eligible and opens the door for other types of charitable support. Now an employer can use funds from its private foundation or an employer-sponsored donor advised fund to provide direct employee assistance for Covid-19 related expenses. Employers may also provide direct assistance through a non-exempt fund, which would also not be taxable as income for the recipient.

Detailed information on employee assistance and qualified disasters can be found in IRS publication 3833 and on the IRS Disaster Relief Information page.

Through June 30, 2020, Valor CSR is waiving all setup fees for the Instant Corporate Foundation. We want to make it easier and less expensive for you to help your employees through this.

For more information, email Andy Schuricht, call us at (702) 518-0951, or use our contact form. 

Our Program Guidelines provide more information on how the Instant Corporate Foundation works, however, the “qualified disaster” designation has temporarily loosened the rules. For more information, or for anything else, please reach out. We’re always happy to talk.