Employers Consider Hardship Assistance in Response to Covid-19

While the full brunt of the coronavirus still hasn’t smacked the U.S. economy, employers are already examining tax-advantaged hardship assistance programs to support workers facing significant health and financial challenges due to the emergency.

Employers are contacting tax advisers to discuss strategies for structuring programs that grant cash to employees under tax code Section 139, regarding disaster relief payments. Businesses are also contacting charitable organizations for help creating crisis funds, which permit employers to make tax-deductible donations and employees to collect emergency grants tax free, said Ruth Madrigal, a principal and leader of KPMG LLP’s exempt organizations group.