In 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)

Hurricane Irma

Counties in Florida (48)

Counties in Georgia (7)

Hurricane Maria

Municipios in Puerto Rico (10)

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