WOTC Again Could Deliver Post-Hurricane Tax Credit to Employers
In the wake of the devastating hurricane that struck the Northeastern part of the
Atlantic seaboard, a democratic delegation of senators from both New York and New
Jersey are co-sponsoring legislation that would include federal tax credits for disaster-related expenses
and tax credits for businesses and homeowners. Senators Charles Schumer (D-NY) and
Robert Menendez (D-NJ) have proposed the “Hurricane Sandy and National Disaster
Tax Relief Act of 2012.” In it, they are asking to make fully tax deductible
any repair expenses incurred by homeowners in the hurricane’s aftermath. In
addition, businesses would get a tax credit for continuing to pay employees even when
the business was shut down due to the storm, and also for hiring new employees who
lived in the core disaster area on the date of the hurricane. Senator Menendez said
that “This package will provide the opportunities for them to regain their lives,
regain their businesses and help us recover.”
Certainly such a tax credit is not unprecedented, as a similar tax credit, administered
as part of the Work Opportunity Tax Credit (WOTC), was created in the aftermath of
the hurricanes in the Gulf of Mexico, namely Hurricane Katrina. Recall that the Katrina
Tax credit was available to any business that kept people on their payrolls or hired
new people who resided in the “core disaster area.” It is not farfetched
to imagine that the Sandy tax credit will follow a similar basis.
“These changes to existing tax law are a common sense and simple way to help
disaster victims, and a quick way to get them aid to repair their homes, to recover
losses, and to support their businesses,” Mr. Schumer said.
It is likely that Mr. Schumer and Mr. Menendez will try to work this proposal through
before year’s end to avoid becoming part of the fiscal cliff negotiations.
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