Today President Trump signed into legislation H.R. 1892 which ended the government shutdown earlier this morning.  Included in the legislation are a number of tax extenders and new tax provisions – more notably the extension of the Federal Empowerment Zone Employment Credit and the Federal Indian Employment Credit and the introduction of the Employee Retention Credit for Employers Affected by California Wildfires.

The Federal Empowerment Zone Employment Credit (Fed EZ) allows a credit of up to $3,000 per qualified employee (must work and reside within an empowerment zone).  The Federal Indian Employment Credit (Fed IEC) allows a credit of up to $4,000 per qualified employee (must be an enrolled member or the spouse of an enrolled member of an Indian tribe).  Both the Federal Empowerment Zone Employment Credit and Federal Indian Employment Credit expired on December 31, 2016, but the new bill extends the credit programs to December 31, 2017 which means qualified employers may take advantage of the programs on their 2017 tax returns.

The new Employee Retention Credit for Employers Affected by California Wildfires is similar (in calculation) to the Employee Retention Credit for Employers Affected by Hurricanes Harvey, Irma and Maria. Qualified businesses are defined as employers with locations within the California wildfire disaster zone whose businesses were rendered inoperable as a result of damage sustained by reason of wildfires on or any day after October 8, 2017 and before January 1, 2018.  The credit is 40% of qualified wages up to $6,000 (maximum credit of $2,400) paid to qualified employees during which time the business was rendered inoperable. 

To read more about these provisions or the other provision included in H.R. 1892, you can find a copy of the legislation here - https://www.congress.gov/bill/115th-congress/house-bill/1892/text#toc-H514FC9B8F1BC41E3B61ED883360ECDA1.

For more information on tax incentive programs available in your area, find your state below.