Tax Incentives Blog

Hurricane Relief Employee Retention Tax Credit for Employers

Posted by Rose Davidson on Oct 11, 2017 12:28:52 PM

disaster.jpgIn response to the devastating hurricanes that struck the U.S. and its territories recently, President Trump on September 29, 2017 signed the Disaster Tax Relief and Airport and Airway Extension Act of 2017 (HR 3823) to provide targeted tax relief for taxpayers impacted by Hurricane Harvey, Irma and Maria.  Included in the legislation is an employee retention tax credit for qualified employers located within designated disaster areas related to the hurricanes.  The tax credit is equal to 40% of qualified wages of up to $6,000 (a maximum credit of $2,400) for each qualified employee.

Qualified businesses are defined as employers with locations within disaster zones whose businesses were rendered inoperable as a result of damage sustained by either Hurricane Harvey, Hurricane Irma or Hurricane Maria, but continued to pay employees during their recovery efforts during specified periods:

  • Period for Hurricane Harvey – between August 23, 2017 and the date the location resumed operations or January 1, 2018 (whichever comes first)
  • Period for Hurricane Irma – between September 4, 2017 and the date the location resumed operations or January 1, 2018 (whichever comes first)
  • Period for Hurricane Maria – between September 16, 2017 and the date the location resumed operations or January 1, 2018 (whichever comes first)

Qualified employees are defined as those employed by the qualified employer whose principal place of employment was in a Hurricane Harvey, Hurricane Irma, or Hurricane Maria disaster zone during the specified periods above.

Qualified wages are defined as the wages paid to qualified employees by qualified employers during the specified periods above (up to $6,000).

The credit is 40% of qualified wages of up to $6,000 (up to $2,400 per qualified employee).

The credit cannot be taken on the same wages used to calculate the Work Opportunity Tax Credit for eligible employees for the same period.

The designated disaster zones for Hurricane Harvey, Hurricane Irma and Hurricane Maria include:

Hurricane Harvey

Counties in Texas (39)

Aransas

DeWitt

Jackson

Matagorda

San Jacinto

Austin

Fayette

Jasper

Montgomery

San Patricio

Bastrop

Fort Bend

Jefferson

Newton

Tyler

Bee

Galveston

Karnes

Nueces

Victoria

Brazoria

Goliad

Kleberg

Orange

Walker

Calhoun

Gonzales

Lavaca

Polk

Waller

Chambers

Hardin

Lee

Refugio

Wharton

Colorado

Harris

Liberty

Sabine

 

 

Hurricane Irma

Counties in Florida (48)

Alachua

Dixie

Lafayette

Orange

Sumter

Baker

Duval

Lake

Osceola

Suwannee

Bradford

Flagler

Lee

PalmBeach

Union

Brevard

Gilchrist

Levy

Pasco

Volusia

Broward

Glades

Manatee

Pinellas

 

Charlotte

Hardee

Marion

Polk

 

Citrus

Hendry

Martin

Putnam

 

Clay

Hernando

Miami-Dade

Sarasota

 

Collier

Highlands

Monroe

Seminole

 

Columbia

Hillsborough

Nassau

St. Johns

 

DeSoto

IndianRiver

Okeechobee

St. Lucie

 

 

Counties in Georgia (7)

Camden

Glynn

Charlton

Liberty

Chatham

McIntosh

Coffee

 

 

Hurricane Maria

Municipios in Puerto Rico (10)

Arecibo

Ciales

Canovanas

Juncos

Carolina

Las Piedras

Catano

Manati

Cayey

Naranjito

Looking for more information about employment-based tax credit programs such as the WOTC? Download your free guide below.

Download Free Guide

Topics: Employment Incentives, WOTC

Rose Davidson

Written by Rose Davidson

Rose is the Director of Credits and Incentives for the Southeast area. She has over 12 years of experience in federal and state tax credits and has deep technical knowledge of many federal and state tax credit programs, including the Federal Work Opportunity Tax Credit, the Federal Empowerment Zone Employment Credit, various state enterprise zone credit programs and Georgia statutory tax credits.

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