Potential Hurricane Relief Tax Credit for Employers
Congress Considers H.R. 6854 to Deliver Targeted Hurricane Tax Credit
On September 20, 2018, Representative George Holding (R-NC), along with lead co-sponsors Representatives Tom Rice (R-SC) and David Rouzer (R-NC), introduced, H.R. 6854, the Hurricane Florence Tax Relief Act to deliver targeted tax relief to victims of Hurricane Florence. The law includes an employee retention tax credit for employers similar to other recent Hurricane disasters. Congress may consider this bill following the November mid-term elections as part of a broader Hurricane relief package.
Should H.R. 6854 be signed into law, qualifying businesses with locations within the disaster zone could seek a retention tax credit for continuing to pay their employees during the time frame that the business was impacted by the disaster. Employers may seek a 40% credit for wages paid to employees (up to a maximum wage base of $6,000) during the period the business location became inoperable due to Hurricane Florence up until the date the location resumed operations, or until January 1, 2019, whichever comes first. The credit could not be taken on the same wages used to calculate the WOTC program for an eligible employee for the same period.
Specifically, the bill would provide for:
- A 40% credit on up to $6,000 in wages paid during the period covered
- A business must be located in the Hurricane Florence Disaster Zone
- The trade or business had to be in operation before September 13, 2018
- The trade or business had to become inoperable any day after Sept. 13, 2018 and before Jan. 1, 2019
- Qualified wages include wages paid from when a business became inoperable and go through when the business resumes significant operations
- Employees need to earn qualified wages after Sept. 13, 2018 and before Jan. 1, 2019
- The employee:
- does not have to perform services
- can perform services at a different place of employment than their principle place of employment
- or can perform services at such principle place of employment before significant operations have resumed
As always, the Equifax Government Team is closely following the status of this bill. We will provide updates as they happen.
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