KPMG report: COVID-19 disaster relief payments under section 139
How the end of the emergency declaration has repercussions for how employers provide benefits and reimburse employees for pandemic-related expenses
Section 139
The national emergency disaster declaration under the Stafford Act due to the coronavirus (COVID-19) pandemic ends on May 11, 2023, which has repercussions in a variety of areas, including the way in which employers provide benefits or reimburse employees for certain expenses that are due to the COVID-19 pandemic. Specifically, section 139 was triggered by the emergency declaration and permits tax-free reimbursements by employers for qualified disaster payments, a term that can be broadly defined to include additional expenses of employees (whether personal or business) related to the COVID-19 pandemic. Now, employers that continued to utilize section 139 to provide benefits are evaluating whether it is appropriate to continue offering tax-free benefits as a working condition fringe benefit consistent with the accountable plan rules and/or taxable benefits in certain situations.
Read a May 2023 report [PDF 284 KB] prepared by KPMG LLP: What’s News in Tax: “And Now, the End is Near”: COVID-19 Disaster Relief Payments under Internal Revenue Code Section 139, which explains how the end of the emergency declaration has repercussions for how employers provide benefits and reimburse employees for pandemic-related expenses.
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