Notice 2021-42 extends the federal income and employment tax treatment provided in Notice 2020-46, 2020-27 I.R.B. 7, to cash payments made to charitable organizations described in section 170(c) of the Code (section 170(c) organizations) after December 31, 2020, and before January 1, 2022, that otherwise would be described in Notice 2020-46.  Notice 2020-46 provided guidance under the Internal Revenue Code (Code) on the federal income and employment tax treatment to employers and their employees of cash payments made before January 1, 2021, for the relief of victims of the COVID-19 pandemic in the affected geographic areas under employer sponsored leave-based donation programs.  Under leave-based donation programs, employees can elect to forgo vacation, sick, or personal leave in exchange for cash payments made by their employers to section 170(c) organizations.

Notice 2021-42 will be in IRB:  2021-29, dated July 19, 2021.