Sick Leave Bank With Tax Breaks

Each year federal workers donate tens of thousands of hours to in-house leave banks for use by fellow feds who desperately need extra time off. The program has been a lifesaver for some folks. But the banks take only one kind of deposit: Annual leave.

When Congress set up the leave bank, it didn’t want workers donating “excess” sick leave because they might need it some day themselves. The leave is considered to be a form of disability insurance. That made sense when all feds were under the CSRS retirement program which rewards people (with higher lifetime annuities) who don’t use sick leave.

But now that most feds are under the FERS program, which has a use-it-or-lose-it sick leave policy, some people think the times have changed. Some people say they plan to catch FERS flu in their last year of work to burn up their sick leave balances. Others believe sick leave should be reserved only for the sick. A growing number say they would be happy to “lose” their sick leave balances if, at the end of a career, they could donate it to a leave bank.

We’ve had lots of e-mails on the subject lately. Here’s one of them, but with a new tax-break twist, from someone with 1,000 hours of unused sick leave:

“…I feel that sick leave is for use only when one is actually sick… That said, I am also very uncomfortable with the fact that I will likely leave the equivalent of six months or more of salary in sick leave on the table when I retire.

“I don’t believe that it would be ethical of me to contract the ‘FERS flu’ shortly before retirement when there is another, beneficial use for these hours. For example, couldn’t Congress, the federal agencies and the IRS work out a way for retiring FERS employees to donate a portion or all of their unused sick leave hours to a sick leave ‘bank’ to the benefit of other FERS employees who may run out of sick leave and badly need more hours due to a serious or catastrophic illness during their active service years? I hear about employees who need additional sick leave because they have used all of their own available time. The benefit to retiring FERS employees in making these donations would be the ability to claim the cash equivalent as a charitable contribution for tax purposes. As a FERS employee who has been blessed with good health during my working years so far, I would be more than happy to leave those unused sick leave hours that I have earned over the course of my career knowing that this money would benefit a FERS employee who may not have been as fortunate as I. Since one of the principal ways that philanthropy is rewarded monetarily in our country is through the tax deduction benefit, it seems that this arrangement could be applied in some way to retiring FERS employees and their donated hours.” Karen

Stimulus Checks

Wednesday’s item about those stimulus checks the IRS is going to mail out didn’t please everybody. For example:

“… my wife and I got forms from the IRS to file a 1040A for the stimulus GIVEaway. Being Military retired we only receive the $300/$600 (since they didn’t) pay taxes. HAD IT NOT BEEN FOR THE MILITARY THERE WOULD BE NO AMERICA.” Jack H.

Upgraded to “Totally Useless Factoid” (Just a Guess)

If you happen to have leftover Peeps on Sunday, there’s an alternative to letting them turn crunchy: Peep Waldorf Salad. Heed the tip – use the yellow or pink Peeps as the lavender ones turn the salad “grayish.”

To reach me: mcausey@federalnewsradio.com

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