Government Agencies Stepping up in Light of Hurricanes

Blank Rome Workplace Article

n the wake of the catastrophic flooding caused by Hurricane Harvey, there are several steps that employers can take to help their impacted employees. To assist employers, the Internal Revenue Service (“IRS”), the Department of Labor (“DOL”) and the Pension Benefit Guaranty Corporation (“PBGC”) have each issued guidance on relief in response to Hurricane Harvey.

Tax-Free Disaster Assistance to Employees

Section 139 of the Internal Revenue Code (“Code”) allows an employer (or other entities) to provide tax-free disaster relief to its employees in those instances where the payments constitute qualified disaster relief payments. Generally, a “qualified disaster relief payment” includes any amounts paid to an individual that are not otherwise compensated for by insurance or otherwise:

  • To reimburse or pay reasonable and necessary personal, family, living or funeral expenses incurred as a result of a qualified disaster; or
  • To reimburse or pay reasonable and necessary expenses incurred for the repair of a rented or owned personal residence and/or the repair or replacement of its contents as a result of a qualified disaster.

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