If this pandemic has a silver lining, Code Section 139 may be just that. Section 139 offers employers a flexible and tax-free way to reimburse employees for certain qualifying expenses incurred because of COVID-19. For example, a business can provide personal gifts, living reimbursements, family costs, etc., to individuals working for the company and these expenses become deductible to the company. It is tax-free and non-reportable to the recipient.

Learn about this strategy for tax firms. With just a few steps, you can save your business clients an average of a thousand dollars per staff member—all while helping their employees (or others like family) with disaster-related home expenses. Qualified expenses may include medical home quarantine, home office, child-care/home care for students, health-related expenses, meals, mental health, and housing.

Learning Objectives:

• Recognize how Section 139 gives an employer the flexibility to reimburse employees for certain COVID-19 qualifying expenses


• Identify what expenses qualify under Section 139


• Recall a case study example of a small business


• Recall the steps to take to save your business clients thousands of dollars—while simultaneously helping their employees