Sick Leave Direct Donations

Sick leave donations will be processed using these forms:

• Sick Leave Direct Donation – Donor Form
• Sick Leave Direct Donation – Recipient form
• Sick Leave Tax Withholding Form (applicable if donation is a taxable event)

Sick leave donations will be considered a taxable event to the donor unless the situation qualifies as a medical emergency pursuant to IRS guidelines. For sick leave donation purposes, a medical emergency is defined as “a major illness or other medical condition that requires a prolonged absence from work (40 hours), including intermittent absences that are related to the same illness or condition”. 

Donations not qualified as medical emergencies will have the cash value of the donated sick leave included in gross income of the donor, and will be treated as wages for employment tax purposes.  Such wages will be considered a lump-sum payment and subject to 25% income tax, Medicare, and applicable social security withholdings.  Individuals making a donation are encouraged to consult a tax advisor. 

Employees may receive hours if they meet all of the following criteria:

• are both active employees of Texas A&M-Corpus Christi
• have exhausted all of their sick leave accruals
• have exhausted any previously donated hours they received
• have exhausted the full allocation of hours from the sick leave pool.

FAQ

• A donor may donate any amount of his or her available sick leave accruals to an eligible recipient.
• Donors must complete the Sick Leave Direct Donation–Donor Form and submit it to Human Resources.
• An employee is not required to be in a leave-accruing position at the time a donation is made, but will need to have sufficient hours to cover the donation.
• Once sick leave is donated it will no longer be your property and may not be returned to you if the recipient is unable to use the entire donated sick leave. 
• Donated sick leave may not be paid to the Estate, donated to sick leave pool or transferred to another employee.

Tax implications

In accordance with Internal Revenue Service policy, unless a medical emergency applies the cash value of donated sick leave is includable in your (the donor’s) gross income and will be treated as wages for employment tax purposes with such wages being considered a lump-sum payment subject to 25% income tax, Medicare, and applicable social security withholdings.

Individual sick leave donations will not be a taxable event for the donor if the donor contributes sick leave to a recipient who is absent due to a medical emergency. A medical emergency is defined as an absence of five days or more due to an injury or illness and is supported by the necessary medical documentation.

Individual sick leave donations will be a taxable event for the donor if the donor contributes sick leave to a recipient who is either not taking leave due to an injury or illness or to a recipient who has taken leave which has resulted in an absence of less than five days.

Example #1

• Rita has returned to work after being absent for three days due to an illness and has exhausted her sick leave. John, one of her coworkers, speaks with his human resources leave administrator about contributing a sick leave donation (SLD) to her accruals. The leave administrator informs John that Rita will need 20 hours to replenish her sick leave balance in order to avoid being on leave without pay. Because she has missed less than five days of work due to her medical condition, her absence will not be considered a medical emergency for SLD purposes. Therefore, John is informed that his donated hours will be taxable. He currently earns $15 an hour. To find out the monetary amount of his donation that will be taxed, calculate the following:
• $15/hr. x 20 hours donated = $300
• $300 will be added as non-compensatory compensation to John's wages and will be taxed as part of his gross income as follows:

Example #2

• Glenn has been absent for over two weeks due to a catastrophic condition and will be utilizing the sick leave pool after satisfying the 80 hour requirement of missed work. Upon review of his leave records, Glenn has calculated that he will be on leave without pay for 15 hours before he will meet the requirement and may access the pool. Javier, a friend who works in another department within Texas A&M University-Corpus Christi, chooses to contribute 15 hours to Glenn's sick leave accruals.
• This is a non-taxable event for sick leave donation purposes, as Glenn has missed more than 40 hours of work due to a medical emergency. Hours may be donated to Glenn until he has access to the sick leave pool.

Example #3

• Brent has depleted his sick leave accruals within the past three months for various non-catastrophic reasons. Mary, a colleague in Brent's department, learns of his exhausted accruals and wishes to donate 30 hours to his sick leave balance to ensure he has adequate paid leave to cover any medical condition that may arise in the near future. She earns $24 per hour.
• $720 will be added as non-compensatory compensation to Mary's wages and will be taxed as part of her gross income as follows:
• $24/hr. x 30 hours donated = $720

Upon full completion of the Sick Leave Direct Donation–Donor Form, the form is submitted to Human Resources for review the donation request and confirmation of eligibility. Following approval of the donation, Human Resources provide the Sick Leave Direct Donation- Recipient form to the recipient for completion along with requesting appropriate medical certification to determine qualification for medical emergency. 

Approved sick leave donations will be processed by Human Resources deducting sick leave hours from the donor's account and adding the donation to the recipient's donated sick leave. A confirmation notice will be sent to the HR Liaison/Leave Administrator for each of the respective departments. Human Resources will notify a department to make the necessary transactions if another leave database is utilized by the donors’ or recipients’ department.

• House Bill 1771 Text
• House Bill 1771 - Sick Leave Donation Guide
• System Regulation, 31.06.02