On March 13, 2020, President Trump declared a national emergency
in connection with the coronavirus disease. The specific nature of
this declaration triggered the provisions of Section 139 of the
Internal Revenue Code, which provides preferential tax treatment of
certain types of relief payments. This SGR Tax Blog
posting will outline the applicable rules for such payments, in
three specific scenarios:
- payments to employees
- payments to employees from captive or
controlled charitable organizations
- payments from third-party charitable
organizations
Relief Payments to Employees
While Section 139 applies to a variety of relief, the most
likely payments that employers may be interested in providing to
employees would include payments to reimburse or pay reasonable and
necessary medical, personal, family, living, or funeral expenses
incurred as a result of the disease or the quarantine.
