Stacie's Tax Stuff

WASHINGTON — The Internal Revenue Service today issued two items of guidance in response to the need for charitable and other relief due to the Ebola outbreak in Guinea, Liberia and Sierra Leone. One provides special relief intended to support leave-based donation programs to aid victims who have suffered from the Ebola outbreak in those countries. The other designates the Ebola outbreak in those countries as a qualified disaster for federal tax purposes.

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 providing relief for the victims of the Ebola outbreak in Guinea, Liberia or Sierra Leone. Employees can forgo leave in exchange for employer cash payments made before Jan. 1, 2016. Under this special relief, the donated leave will not be included in the income or wages of the employees. Employers will be permitted to deduct the amount of the cash payment.

For example, if an American company has such a program and makes a cash donation of the value of an employee’s donated leave before January 1, 2016, to an organization that is providing medical services and supplies for the relief of victims of the Ebola outbreak in Guinea, Liberia, or Sierra Leone, the IRS will not consider the amount of that payment as gross income or wages of the employee.  Additionally, the IRS will not assert that the U.S. company can only deduct such cash payments under Internal Revenue Code section 170.

The IRS reminds taxpayers there are some simple steps they can take to ensure that their contributions go to qualified charities, and more information is available at IRS.gov.

The qualified-disaster guidance allows recipients of qualified relief payments related to the Ebola outbreak in Guinea, Liberia and Sierra Leone to exclude those payments from income on their tax returns. Under today’s guidance payments generally include amounts to cover necessary personal, family, living or other qualified expenses that were not covered by insurance.

For example, if an employee living in Guinea receives reimbursement from an employer-sponsored charitable organization for medical expenses incurred by the employee as a result of the Ebola outbreak in Guinea, such reimbursement will not be included in the employee’s gross income for U.S. federal income tax purposes.

Similarly, if an employee of an American company is relocated within Liberia under a quarantine order due to the Ebola outbreak in Liberia, and the American company pays for the employee’s transportation, rent and living expenses related to the quarantine order, such payments will not be included in the employee’s gross income for U.S. federal income tax purposes.

Today’s announcement of qualified relief follows similar steps taken in other qualified disasters, such as the Japan earthquake and tsunami and the Haiti earthquake. The announcement about leave-based donation programs is similar to programs available in the aftermath of Hurricane Sandy and Hurricane Katrina.

WASHINGTON — The Internal Revenue Service is announcing several options for Spanish speakers to get information about the tax provisions of the Affordable Care Act. Two recently issued YouTube videos feature IRS Commissioner John Koskinen: Disposición de La Responsabilidad Compartida (Individual Shared Responsibility Provision) and Crédito Tributario de Prima – Cambios en las Circunstancias (Premium Tax Credit – Changes in Circumstances).

The IRS.gov has information about the Affordable Care Act tax provisions in both English and Spanish to inform and educate the public on how the health care law may affect them. The main Spanish pages include:

• Individuals and Families — Including the premium tax credit and the individual shared responsibility provision and exemptions from that provision.
• Employers — The health care law contains many tax and other provisions for Large Employers and Small Employers.
• Health Care Tax Tips — Timely, easy-to-read tips covering 21 different topics related to the health care law.

These pages provide information about tax provisions that are now in effect and those that will go into effect in 2015 and beyond. The IRS has also developed a number of publications in Spanish currently available online.

By making its products available in Spanish, the IRS is providing relevant information about the law and its provisions, legal guidance, the latest news, frequently asked questions and links to additional resources to a significant portion of taxpayers with limited English proficiency. As many as 1 in 4 uninsured individuals who are eligible for coverage through the Health Insurance Marketplace nationwide are Hispanic.

In addition to the Commissioner’s messages, the agency has several other videos and audio files in Spanish on the health care law and a variety of other relevant and useful tax topics.

Spanish speaking taxpayers may also wish to follow and retweet @IRSenEspanol on Twitter.

Taxpayers can also subscribe to receive brief tips in Spanish on a variety of tax issues by email, or visit the IRS Spanish Newsroom for the most up-to-date information from the agency.

For information in Spanish about the health care provisions of the Affordable Care Act, visit CuidadoDeSalud.gov. For more information about a variety of IRS resources in Spanish on the Affordable Care Act and more visit the IRS website, IRS.gov.

Additional Resources

• IRS.gov/CuidadoDeSalud
• IRS Video: Crédito Tributario de Primas
• IRS Video: Crédito Tributario de Primas: Cambio en su Situación
• IRS Video: La Responsabilidad Compartida para Individuos
• IRS Publication 5120(SP), Hechos sobre el Crédito Tributario de Prima
• IRS Publication 5156(SP), Datos acerca de la Disposición de la Responsabilidad Compartida
• IRS Publication 5172(SP), Hechos Sobre Exenciones de Cobertura Médica