FAQs: What is the Section 139 Tax-Free Disaster Assistance Deduction for COVID-19 Related Payments and Reimbursements?
Section 139 allows employers to offer tax-free disaster relief payments to their employees for certain unreimbursed expenses. While Section 139 payments cannot be used to pay wages, they can be used to reimburse employees for “reasonable and necessary” expenses incurred due to the COVID-19 pandemic.