On September 29, 2017, President Trump signed the Disaster Tax Relief and Airport and Airway Extension Act of 2017, H.R. 3823, which provides certain tax relief to taxpayers impacted by Hurricanes Harvey, Irma, and Maria. Notably, H.R. 3823 provides an employee retention tax credit equal up to 40% of up to $6,000 of qualified wages paid by eligible employers to eligible employees of Qualified Wages for each Eligible Employee for the taxable year for up to $2,400 tax credit.
Eligible Employer
An Eligible Employer is one that conducted an active trade or business on the Eligible Date in the Hurricane’s disaster zone and such trade or business was inoperable on any date after the Eligible Date and before January 1, 2018. The Eligible Employer must also continue to pay the wages of Eligible Employee during the inoperable period, as noted below. Eligible Employee An Eligible Employee is an employee whose principal place of employment with an Eligible Employer was in a Hurricane.
The Eligible Date for each respective Hurricane is as follows:
- Hurricane Harvey – August 23, 2017
- Hurricane Irma – September 4, 2017
- Hurricane Maria – September 16, 2017
Qualified Wages
Qualified Wages generally means wages paid or incurred by an Eligible Employer with respect to an Eligible Employee on any day after the Eligible Date and before January 1, 2018, which occurs during the period: • beginning on the date on which the trade or business first became inoperable at the place of employment of the employee immediately before the Hurricane and • ending on the date on which such trade or business resumed significant operations at such place of employment.
One credit per employee, including WOTC An employer may only claim a tax credit for either the Hurricane employee retention credit or the Work Opportunity Tax Credit for any period for the same employee.
Other Disaster Tax Credits
During the year other Credits may become available please contact TCG for a review of other potential tax credits.