The IRS is extending a vacation, sickness, or personal vacation tax break that employees are giving up in exchange for donations to charities due to the ongoing Covid-19 pandemic.
Wednesday’s guidance (Communication 2021-42) states that accrued leave converted into cash and donated to charities that help the victims of the pandemic will not be considered taxable compensation for the 2021 calendar year. The communication extends the previous discharge (Communication 2020-46) issued last year.
- The guidelines apply to cash payments to Section 170 (c) organizations after December 31, 2020 and before January 1, 2022.
- Employers can deduct the cash payments …