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Tax Free Payments for Expenses

Under Internal Revenue Code Section 139 – Disaster Payments allow employers to provide employees with tax-free payments for expenses such as:

  • Over-the-counter medications, hand sanitizer, and home disinfectant supplies.
  • Child care or tutoring due to school closings.
  • Work-from-home expenses such as setting up a home office increased utility expenses and higher Internet costs.
  • Increased commuting costs, such as taking a taxi instead of using public mass transit.
  • Unreimbursed health-related expenses.

These payments can be deducted by the employer for tax purposes.  The payments do not get reported on a W-2 or 1099.  For more information give us a call.