Some of our clients have employees who have been hard hit by Hurricane Sandy. Employers want to help their employees, and employees not affected by the hurricane want to help their colleagues.
Section 139 of the Internal Revenue Code allows employers to give aid and assistance to employees and others adversely affected by a presidentially declared disaster. Hurricane Sandy is a presidentially declared disaster. Under Section 139, an employer can pay or reimburse employees or other individuals for unreimbursed reasonable and necessary personal, family, living or funeral expenses, such as medical, temporary housing, or transportation expenses, that they incur as a result of the disaster. The amounts so reimbursed are excluded from gross income of the employees and the employees do not have to account to the employer for how the amounts were spent.