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My company administers a program where employees can donate Paid Time Off (PTO) to fellow employees experiencing a hardship. Can I deduct the value of the PTO I donate from my taxes?

Presuming that the answer is "No", what can my employer do, if anything, to allow this to happen? Form some kind of charitable organization to administer this program?

  • A clever lawyer might be able to set up a way for this to work. But it's not easy, since the donation is an intangible. It would have to go through an eligible organization. – David Schwartz Oct 24 '17 at 22:09
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    Brythan's answer is correct but there is another issue here: you are not donating to a qualified charity. So if you give $100 to one of your coworkers (for whatever reason), you cannot deduct that either. – Pete B. Oct 25 '17 at 11:11
  • I've got really mixed feelings about this "benefit." – David Ehrmann Oct 26 '17 at 1:26
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When you donate paid time off (PTO) to a fellow employee, you don't actually lose money. You get paid the same, either way. You work a little more. It's essentially the same as volunteering labor. As a result, you can't claim a charitable donation. You didn't donate anything with tax implications.

In order to claim a charitable donation, you have to make the donation out of after-tax money or goods presumably purchased with after tax money. I don't see how you could do that with a PTO "donation" to another employee.

See here for example, the leave-sharing examples. Note that if your employer donates money to a charity for you, you can deduct your PTO donation but you have to pay taxes on it first. That hardly seems advantageous to you. It basically gets you back to the leave sharing example, only with more paperwork.

  • Sadly, this seems to be the correct answer. Our plan falls under the "Medical Emergency Leave-Sharing Plan" in the examples you reference. The IRS has 'graciously' allowed me to help out a fellow employee without having to pay an additional tax penalty for doing so. – Michael J. Oct 26 '17 at 14:28

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