This past week, September 29th, President Trump signed into law the Disaster Tax Relief and Airport and Airway Extension Act of 2017. In addition to allowing early withdrawals and loans from retirement plans, deductions for casualty losses, and other personal tax considerations, there is an employment related tax credit for employers (Sec. 503) for retaining their employees during one of the three recent hurricanes; Harvey, Irma, and Maria.
Qualifying businesses with locations in one of the Federal declared disaster areas can claim a tax credit for continuing to pay their employees during the time that the business was inoperable until the such time the business resumed significant operations. Employers can receive a 40% credit for wages paid to employees, up to a maximum wage base of $6,000 during this ‘inoperable’ time, or until January 1st, 2018, whichever comes first.
The counties covered include;
Hurricane Harvey:
- Counties in TX (39): Aransas, Austin, Bastrop, Bee, Brazoria, Calhoun, Chambers, Colorado, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Hardin, Harris, Jackson, Jasper, Jefferson, Karnes, Kleberg, Lavaca, Lee, Liberty, Matagorda, Montgomery, Newton, Nueces, Orange, Polk, Refugio, Sabine, San Jacinto, San Patricio, Tyler, Victoria, Walker, Waller, Wharton
Hurricane Irma:
- Counties in FL (48): Alachua, Baker, Bradford, Brevard, Broward, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duval, Flagler, Gilchrist, Glades, Hardee, Hendry, Hernando, Highlands, Hillsborough, Indian River, Lafayette, Lake, Lee, Levy, Manatee, Marion, Martin, Miami-Dade, Monroe, Nassau, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Putnam, Sarasota, Seminole, St. Johns, St. Lucie, Sumter, Suwannee, Union, Volusia
Counties in GA (7): Camden, Charlton, Chatham, Coffee, Glynn, Liberty, McIntosh
Hurricane Maria:
- Areas in Puerto Rico (10): Arecibo (Municipio), Canovanas (Municipio), Carolina (Municipio), Catano (Municipio), Cayey (Municipio), Ciales (Municipio), Juncos (Municipio), Las Piedras (Municipio), Manati (Municipio), Naranjito (Municipio)
Within your payroll system, you may want to track the payment of these wages separately from ‘Regular’ or ‘Salary’ earnings for ease in identifying the wages at year end.
The credit will be taken at year end as a General Business Tax Credit. Consult your CPA or Tax Accountant.
