Non-Taxable Help for Your Struggling Employees While Maximizing Your Deductions

Dear Clients & Friends,

Covid-19 and the associated stay-at-home orders have been devastating for many businesses and individuals. Through it all, we have been your trusted resource, keeping you updated on federal aid programs that have been made available to help many businesses survive and recover. The most notable of these is the Paycheck Protection Program (PPP). What may be less well known is that other benefits are also available for employers to help their employees.

Because Covid-19 is a declared federal disaster, under Section 139 of the Internal Revenue Code these benefits are non-taxable to your employees and fully deductible to you as the employer! Specifically, the allowed benefits that can assist your employees in managing the Covid-19 crisis include:  

  • Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster; 
  • Unreimbursed medical expenses; 
  • Expenses for protective masks and hand sanitizer and/or other costs associated with working from home; and 
  • Dependent care expenses due to school closures. 

In a recent article, we discussed how you can maximize your generosity during the holiday season. If you are considering issuing bonuses by year-end we can also help you identify ways to strategically maximize the opportunities of providing a non-taxable benefit to your staff during the holidays. In short, by exploring this option, you can reward their loyalty, support their families, and give the whole country a boost as we seek to recover and move forward together from what has been a difficult year.

Stay safe & healthy,

The CJBS Team