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October 2, 2023

IRS issues guidance on leave-based donation programs to support Hawaii wildfire victims

In Notice 2023-69, the IRS released guidance on the federal income and employment tax treatment of leave-based donation programs to aid the victims of the Hawaii wildfires that began on August 8, 2023.

Leave-based donation programs allow employees to forgo their accrued vacation, sick or personal leave in exchange for cash donations that the employer makes to charitable organizations.

Under Notice 2023-69, leave-based donation payments made by employers before January 1, 2025, to IRC Section 170(c) organizations to aid the wildfire victims will not be treated as employees' gross income, wages or compensation. Employers should not include the payments in Box 1, 3 (if applicable), or 5 of the electing employees' Forms W-2.

Employees forgoing their leave will not be treated as receiving the value of the leave as income and cannot claim a charitable deduction for that amount.

Employers may deduct the leave-based donation payments as business expenses under IRC Section 162 or charitable contributions meeting the requirements under IRC Section 170.


Employers are not required to adopt the leave-based donation program allowed under Notice 2023-69.

Although virtually identical relief has been provided before for different disasters, the IRS continues to view leave-based donations as a limited exception to the general rule that an employee cannot avoid federal income and employment tax on wages by redirecting payments to a third party, even if that third party is a public charity.

For more information on qualified charitable organizations for disaster relief, see the IRS website.


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (
Compensation and Benefits Group
   • Christa Bierma (
   • Stephen Lagarde (
   • Bing Luke (
   • Rachael Walker (

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor