NEW Hurricane Relief Law with Tax Credit for Employers

IRS Letter 226J

On September 29, 2017, President Trump signed into law the Disaster Tax Relief and Airport and Airway Extension Act of 2017 to deliver targeted tax relief to victims of Hurricanes Harvey, Irma, and Maria. The law includes an employee retention tax credit for employers.

Qualifying businesses with locations within the disaster zones can seek a retention tax credit for continuing to pay their employees during the timeframe that the business was impacted by the disaster. Employers can 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 the hurricane(s) up until the date the location resumed operations, or until January 1, 2018, whichever comes first. The credit cannot be taken on the same wages used to calculate the WOTC program for an eligible employee for the same period.

The coverage areas are the designated disaster zones for Hurricane Harvey, Hurricane Irma, and Hurricane Maria. Currently this includes:

  • Hurricane Harvey:
    • Counties in TX (41): Aransas, Austin, Bastrop, Bee, Brazoria, Caldwell, Calhoun, Chambers, Colorado, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Grimes, 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
    • County-equivalents in US Virgin Islands (2): St. John (Island), St. Thomas (Island)
  • Hurricane Maria:
    • All of Puerto Rico: 78 municipalities

Please contact us to speak to one of our tax credit specialists so we can help you prepare to file for this disaster tax credit relief.

About Michael Montgomery

Michael Montgomery is Director, Product Management for Equifax Workforce Solutions where he leads strategy and product development for the company’s Tax Credits and Incentives solutions. Montgomery has a B.S. in Marketing from the University of Arizona as well as an MBA from Southern Methodist University’s Cox School of Business.