Japan quake victims qualify for disaster tax relief — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Japan quake victims qualify for disaster tax relief

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in Human Resources

The IRS has designated the Japanese earthquake and tsunami as a disaster for federal tax purposes.

Employers with employees in Japan may provide tax-free disaster relief, including reimbursements or payments for reasonable and necessary personal, family, living, or funeral expenses not otherwise covered by insurance; and reasonable and necessary expenses to repair homes, or to repair or replace personal belongings.

Employer-sponsored private foundations may make disaster relief payments to employees without affecting their tax-exempt status.

Warning: Paying lost wages to employees remains fully taxable. (Notice 2011-32, IRB 2011-18)

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