Hurricane Sandy Tax Relief

In the wake of Hurricane Sandy, the largest recorded hurricane to form in the Atlantic basin, many of our clients are facing significant business disruptions. As you and your employees recover from the hurricane, we want to remind you of tax relief that may be applicable to your situation.

Tax-Free Disaster Relief Payments to Employees

Some employers may be considering disaster-related employee financial assistance. Payments that qualify as "qualified disaster relief payments" may be excluded from the employee's gross income but are generally deductible for the employer. Employers do not have to require employees to account for actual expenses, as long as payments are reasonably expected to be commensurate with expenses incurred. The information reporting requirements normally applicable to wage payments do not apply to qualified disaster relief payments.