Examples of Taxable and Nontaxable Events

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.

Please see the following examples:

Example #1

• Rashida 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 liaison about contributing a sick leave donation (SLD) to her accruals. The liaison informs John that Rashida 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 the same TAMU component, 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