Employer-provided hurricane relief can be excluded from employees’ taxable income 

November 5:   The IRS announced that because Hurricane Sandy is designated as a “qualified disaster” for federal tax purposes, qualified disaster relief payments made to individuals by their employer or any person can be excluded from those individuals’ taxable income.

The IRS provided information concerning the qualified disaster treatment of payments relating to Hurricane Sandy in IRS release IR-2012-84 (November 2, 2012).


As defined in the IRS release, “qualified disaster relief payments” that are not to be included in the individual recipient’s gross income include:


  • Amounts to cover necessary personal, family, living or funeral expenses that were not covered by insurance
  • Expenses to repair or rehabilitate personal residences or repair or replace the contents to the extent that they were not covered by insurance
    • Employer-sponsored private foundations

      The designation of Hurricane Sandy as a qualified disaster also means that employer-sponsored private foundations may provide disaster relief to employee-victims in areas affected by the hurricane without affecting their tax-exempt status.


      Employer-sponsored private foundations are to follow Publication 3833, Disaster Relief: Providing Assistance Through Charitable Organizations, in providing assistance to employees or their family members affected by Hurricane Sandy.


      Read Publication 3833 [PDF 1.18 MB]




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©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

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