The IRS has approved an additional, temporary tax relief measure for businesses located in one of the declared disaster areas of Texas, Florida and Georgia. Here are the details:
- The Disaster-Related Employment Relief credit is considered an employee retention credit for employers affected by either Hurricanes Harvey or Irma and is not related to the Work Opportunity Tax Credit (WOTC).
- Your principle place of employment must have become inoperable on any day after Aug. 23, 2017, for Hurricane Harvey, or Sept. 4, 2017, for Hurricane Irma, as a result of damage sustained from the storm.
- The credit may be taken on wages of those employees who were principally employed by you the day of the storm (see above), and still employed after the business returned to full operation.
- The amount of credit that may be taken is 40% of total wages paid during the eligible dates, on a maximum of $6,000 in wages.
- Eligible wages are those wages paid to employees beginning on the date that the employer’s principle place of employment became inoperable, and ending on the date when business resumed significant operations at that location (or Dec. 31, 2017).
- Eligible wages include wages paid during the inoperable period without regard to whether the wages were for no service, service at a different location or service at the principal place of employment, before significant operations resumed.
- WOTC may not be taken on the same qualified wages.
- There is no requirement for certification to take the Disaster-Related Employment Relief credit.
- Employers will need to retain proof of inoperability of your business (dates) and show that employee(s) were on payroll at time of storm and after.
If you believe your business qualifies for this employment tax relief credit, and you would like to further discuss how you may do so, contact the professionals at HKP at 888-556-0123 and ask for the tax credit department.