To speed recovery to the devastated areas of Hurricanes Harvey, Irma and Maria, President Trump signed the Disaster Tax Relief and Airport and Airway Extension Act of 2017 (Disaster Relief and FAA Act of 2017) on September 29, 2017. The tax relief in the Disaster Relief and FAA Act of 2017 includes an employee retention credit for eligible employers.
The employee retention credit allows eligible employers in the hurricane disaster areas a 40-percent credit for qualified wages paid to eligible employees. The amount of qualified wages which may be considered for any one eligible employee is limited to $6,000. The credit is part of the current year business credit and therefore is subject to tax liability limitations. This credit does not apply to wages paid to employee-owners who own more than fifty percent of the business. For purposes of this credit:
Qualified wages include wages paid without regard to whether the employee performs no services, performs services at a different place of employment other than the principal place of employment, or performs services at the principal place of employment before significant operations have resumed.
Employers cannot claim a retention credit and a Work Opportunity Credit for the same employee.
The employee retention credit is intended to encourage the economic recovery of the hurricane affected areas. If you have any questions related to this credit, please call our office. We are here to help.