IRS Update: Tax Guidance Related to Ebola Outbreak

This week the IRS issued two types of guidance for taxpayers, responding to the need for charitable donations and other relief efforts due to the Ebola outbreak in Guinea, Liberia and Sierra Leone. The first provides special relief intended to support leave-based donation programs to aid victims who have suffered from the Ebola outbreak, and the other defines the Ebola outbreak as a qualified disaster for federal tax purposes.

If you are a taxpayer who wants to get involved, or have been affected by the Ebola outbreak, here’s some more details to get informed about these two updates:

• Under the leave-based donation guidance, employees may donate their vacation, sick or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations that provide relief for the victims of the Ebola outbreak in Guinea, Liberia or Sierra Leone. Check with your employer to see if they have a plan in place where you can forgo your vacation, personal time off, or sick leave in exchange for employer cash payments made before Jan. 1, 2016. The IRS will not consider the amount of that payment as your gross income or wages.
• The qualified-disaster guidance allows recipients of qualified relief payments related to the Ebola outbreak to exclude those payments from income on their tax returns. For example, as an employee of an American company, if you were relocated within Liberia under a quarantine order due to the Ebola outbreak, and the American company pays for your transportation, rent and living expenses, these payments will not be included in the your gross income for U.S. federal income tax purposes.

For more information, please view the IRS Announcement. And if you have questions, TurboTax tax experts are here for you year-round to answer your tax questions, helping you understand what implications these updates may have for you and your family.