New Proposal for Hurricane Sandy Tax Credit Relief
With the support 29 members of the House, both Democrats and Republicans, a new bill was proposed “. . . to provide additional assistance to families and businesses struggling to rebuild in the wake of Hurricane Sandy. . .” The bill, dubbed The Hurricane Sandy Tax Relief Act of 2013 (H.R. 2137), was introduced by U.S. Rep.
Bill Pascrell, Jr. (D-NJ) with a coalition including Reps. Joseph Crowley (D-NY), Rodney Frelinghuysen (R-NJ), Michael Grimm (R-NY), John Larson (D-CT), Frank LoBiondo (R-NJ), Charles Rangel (D-NY), Tom Reed (R-NY), Carolyn McCarthy (D-NY) and Jon Runyan (R-NJ). The bill includes the following provisions to assist businesses in the aftermath of the hurricane:
- Work Opportunity Tax Credits for displaced workers
- Allowing businesses to expense the cost of disaster recovery.
- Allowing businesses to use Net Operating Loss to recover past tax payments or reduce future tax payments, if they are operating with no tax liability during the prescribed period.
- Increase in new markets tax credit for investments in community development entities serving Hurricane Sandy disaster areas.
- Allowing public utilities to reduce their tax liability when rebuilding or replacing assets damaged in the storm.
Said Rep Pascrell:
“This legislation will go a long way towards filling this gap by providing immediate tax relief to those impacted by Sandy’s devastation. Similar tax relief has been passed following some of our country’s worst natural disasters, and Sandy victims deserve nothing less than the same treatment. Despite stepping up to the plate when other regions of the country have been hit by natural disasters, the Northeast was left waiting more than three months for federal aid following Sandy. We simply can’t allow this double standard to continue to hamper recovery efforts.”
The Specific WOTC portion of the bill uses the Work Opportunity Tax Credit to provide tax credits to businesses that hired/employ individuals who:
- Have resided in the Hurricane Sandy disaster area on or after 10/29/12 and before 11/3/12
- Did not apply for unemployment compensation in 2012 prior to 10/29/12, but first applied for or received such compensation after 10/29/12 and before 2/15/13
- Received UI without a break until the earlier of exhausting UI or the hiring date and is hired by a company located in the disaster area is before 1/1/13
Notably, this credit could be captured for rehires – currently not allowed under core WOTC – and this bill allows for simplified self certification. Equifax will be monitoring this bill and will provide updates as necessary.
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