NEW YORK, June 1, 2020 /PRNewswire/ -- Namely, the leading HR platform for mid-sized companies, today confirmed its Section 139 payments functionality. Section 139 of the U.S. Internal Revenue Code allows employers to make certain qualified disaster relief payments to employees that are tax advantaged. In response to the categorization of the pandemic as a national emergency, Section 139 disaster relief payments have escalated in relevancy given the impact of COVID-19 on the workforce. Additionally, the March 2020 Families First Coronavirus Response Act expanded the application of these tax-free payments, giving employers the ability to reimburse or pay employees for "reasonable and necessary personal, family, living, or funeral expenses" incurred as a result of COVID-19.
Section 139 was initially enacted after 9/11 to encourage relief payments to individuals affected by a disaster. Exempt from all employer and employee Federal, State, and Local Taxes (with the exception of the state of Arkansas), these payments are deductible business expenses for an employer. To ensure Namely customers can capture the appropriate taxability when paying an employee, a rules-based payroll earning code has been established in the Namely system.
Organizations are leveraging Section 139 "care cards" to assist employees with medical expenses not compensated for by insurance, the cost of over-the-counter medications, and the costs associated with enabling employees to work from home such as office supplies and increased cell phone costs. When administered through Namely, the corresponding tax benefits are properly structured and tracked.
Larry Dunivan, CEO of Namely, commented, "Managing the workforce across multiple states during a national pandemic is fraught with complexities and concerns. Section 139 was originally legislated for the worst of times and given the impact of the coronavirus, has moved to the forefront for those employers seeking to assist their employees during this time of extreme need."
Namely is the #1 HR Software company that empowers mid-sized businesses to build better workplaces. Its cloud-based software brings HCM, benefits, insights, payroll, and time into a single-view platform to help modern HR teams make data-driven decisions about their people and understand what's really going on in their workforce. The Namely ecosystem includes powerful integrations with market-leading applicant tracking, identity management, ERP, compliance, E-Verify solutions, and more. Serving more than 1,400 clients with 230,000 employees globally, the company is backed by leading investors, including Altimeter Capital, GGV Capital, Matrix Partners, Scale Venture Partners, Sequoia Capital, Tenaya Capital, and True Ventures. For more information, visit www.Namely.com.
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