Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back
Back

Tax-Free Payments to Employees Affected by COVID-19

Written by: Catherine H. Hines

3/30/2020

Since COVID-19 has been declared a national emergency, employers may now make use of existing Internal Revenue Code Section 139 to make “qualified disaster relief payments” free of income and payroll tax and withholding to employees affected by COVID-19. Qualifying disaster relief payments include payments to reimburse reasonable and necessary personal, family, living, or funeral expenses incurred as a result of COVID-19 and not otherwise reimbursed (e.g., by insurance). Although guidance is limited, it appears that employers may pay for child care during to COVID-19-related school closings, unreimbursed health care expenses related to COVID-19, and expenses incurred setting up a home office due to a COVID-19-related office closure. However, qualifying payments do not include wages or income replacements, such as paid sick leave or paid time off.

As long as the payments can reasonably be expected to be commensurate with expenses incurred, employee recipients of qualified disaster relief payments are not required by law to produce receipts to account for their expenses (although they could be required to do so by their employer). It is advisable for an employer making such payments to establish a plan under which such payments are made.

Integrity and trust

At McLane Middleton we establish and maintain long-standing relationships with our clients to help us better achieve their unique goals over time. This approach to building trust requires that our esteemed lawyers and professionals use their broad, in-depth knowledge and work together with integrity to ascertain sound resolutions to legal matters for their clients.

Strength in numbers

McLane Middleton is made up of more than 105 attorneys who represent a broad range of clients throughout the region, delivering customized solutions. As a firm we are recognized as having the highest legal ability rating. The firm is rated Preeminent by Martindale Hubbell and is recognized as one of the nation's leading law firms in Chambers USA. Our attorneys are distinguished leaders in their respective practice areas.

Meet Our People

Commitment and collaboration

McLane Middleton's versatile group of attorneys and paralegals become trusted authorities on each case through collaboration. We work with our clients to learn their individual needs first and foremost and, together, we develop comprehensive solutions to their specific legal matters. This approach helps us exceed our clients' expectations efficiently and effectively, client by client, case by case.

Practice Areas

A history of excellence

McLane Middleton was established in 1919 in New Hampshire, and has five offices across two states. However, deep historical roots don't allow you to become innate. Our firm is organized, technological, and knowledgeable. Our history means we are recognized. But our reputation is built on the highest quality of service and experience in very specific areas of law.

The Firm

Intelligence paired with action

Our team continuously seeks opportunities to enhance their professional development and put key learnings to action. The pursuit of further insight guides us to volunteer service opportunities, speaking engagements, and teaching roles. Our lawyers are sought after thought leaders across their industries, and recipients of leadership awards throughout the region.