Originally created 10/11/05

IRS turns vacation time into storm aid



You no longer need cash to make a financial contribution to hurricane relief efforts, thanks to the Internal Revenue Service.

All you need is some unused vacation days or sick time and an employer willing to take part in the IRS' leave-donation program, where leave time is converted to cash and sent to a qualified tax-exempt charity providing relief to Hurricane Katrina victims.

IRS spokesman Eric Erickson said, for example, if you donate eight vacation hours and get paid $10 an hour, the donation will be $80.

More relief is needed, said Ray Edgar, the director of emergency services for the Augusta chapter of the American Red Cross.

While donations streamed in immediately after the disaster, they have started to trickle, Mr. Edgar said.

"When we started out, we had radio stations, TV stations and the big places like Wal-Mart holding three- or four-day money gathering events. We don't have a whole lot of that going on right now," he said.

Using vacation time allows people to make donations without taking money out of their pocket, Mr. Erickson said.

Because the contribution is not counted as coming from wages, it also reduces the employee's taxable income, said Scott Mezistrano, the senior manger of government relations for the American Payroll Association.

The association, which represents payroll employees throughout the country, lobbied for the IRS to authorize such a program. The only other time the IRS did so was after the Sept. 11, 2001, attacks.

"It just seemed like a good thing for everybody," Mr. Mezistrano said.

Employees interested in donating unused leave time should first approach their employer, Mr. Erickson said.

Even if the company doesn't have this sort of policy in place, they could start one relatively easily, he said.

The work for the employer would be to create documentation of such exchanges.

"(Employers) are going to want a paper trail to make sure the money is given to an organization," he said.

The benefit to companies is that the donations can be used as either a charitable or a business deduction, the IRS reports.

However, the company will have the added expense of paying workers both for vacation time and for the time they would have normally been off.

This opportunity will be available until Dec. 31, 2006, to allow workers who have already used their vacation days this year to donate time next year, when relief assistance is still expected to be in demand.

No companies in Augusta have called the Red Cross about making donations in this way, Mr. Edgar said, and until Monday, he had not heard of the opportunity.

Reach Tony Lombardo at (706) 823-3227 or tony.lombardo@augustachronicle.com.

Leave donations


How it works: You can donate your unused vacation, sick or personal time. It will be converted to cash and will be sent to a charity helping hurricane relief by your employer.


Legal notes: Employees will not be taxed on the income. It does not count as a deduction for the employees. Deadline: Contributions must be paid to the charity by Dec. 31, 2006.


Availability: Ask your employer about the possibility of establishing a leave-donation program. If there isn't one, direct your employer to www.irs.gov, which outlines the policy.