Recently, with overwhelming bi-partisan support, President Trump signed sweeping tax relief measures into law for victims of Hurricanes Harvey, Irma and Maria.

On September 29, President Trump signed H.R. 3823, the “Disaster Tax Relief and Airport and Airway Extension Act of 2017.” One of the most beneficial provisions of the new law to area businesses impacted by the storms, is an “Employee Retention Tax Credit.”

The law provides a tax credit for 40 percent of qualified wages (up to $6,000 per employee) paid to employees by a disaster-affected employer, so they can retain employees, while returning to regular operations.

How to Qualify for the Employee Retention Tax Credit

According to the new legislation, The Employee Retention Tax Credit for Employers is only eligible to employers who owned a trade or business in a “federally declared disaster area,” and was rendered inoperable as a result of damage sustained from the hurricane on any day between the date of the storm and January 1st, 2018.

The effective dates of each storm are as follows:

  • Hurricane Harvey – August 23, 2017
  • Hurricane Irma – September 4, 2017
  • Hurricane Maria – September 16, 2017

According to the law, an “eligible employee” is defined as “any employee whose principal place of employment was in a disaster zone immediately before it occurred.

Furthermore, for purposes of the Employee Retention Credit, qualified wages include any wages paid or incurred between the applicable disaster date and January 1st, 2018, or the date upon which the business resumed significant operations at the principal place of employment (whichever is sooner). Qualified wages include: wages paid without regard to whether the employee performs no services, performs services at a different place of employment than such principle place of employment, or performs services at such principal place of employment before significant operation have resumed.

How MBAF Can Help

At MBAF we want you to be aware of any “tax breaks” that can help maximize your tax strategies. Particularly, if you have suffered losses in the recent storms, we want you to take advantage of every program and incentive that may be available to assist in your recovery.

Contact us today, and we would be happy to assess your situation, and put together a “post disaster” recovery plan for you, and/or your business.

Maximizing tax breaks and benefits for disaster relief can be complex. If you would like to benefit from our expertise in these areas or if you have further questions on this Advisory, do not hesitate to contact our Tax and Accounting specialists, or call us at 1-800-239-1474.