Did you work through Harvey? Your company could be eligible for a tax credit.

Did you work through Harvey? Your company could be eligible for a tax credit.

Did you work through Harvey? Your company could be eligible for a tax credit.

In the wake of Hurricane Harvey’s devastation, Houstonians are working hard to get back on our feet. As we move forward into a remediation phase, we must look for resources and assistance to help us rebuild and get back to business.

To help with the rebuilding process, the federal government has passed the Disaster Tax Relief and Airport and Airway Extension Act of 2017, which provides valuable tax relief for companies affected by the recent hurricanes.

This new tax credit has been created to assist employers who “conducted active trade” in the disaster zones of Hurricanes Harvey, Irma or Maria, and whose “trade or business” was disrupted as a result of hurricane damage. The credit applies to 40 percent of wages paid to an employee “whose principal place of employment” lies within a disaster zone. 

Wages as defined in the bill include all dollars “paid without regard to whether the employee performs no services, performs services at a different place of employment than such principal place of employment, or performs services at such principal place of employment before significant operations have resumed.” 

With a $6,000 wage cap, the maximum credit available is $2,400 per employee, and there is no limit on the number of eligible employees whose wages can be claimed. Companies can utilize the credit as a general business credit on their 2017 federal tax return.

Businesses should note that since the credit requires employee wage information and records of work location, employers must keep detailed documentation on location status, along with pay rates and distributions.

It is also important to note that this credit is wholly separate from the Work Opportunity Tax Credit and does not require employee certification or screening. Employees do not have to meet any criteria other than having a “principal place of employment” in a designated disaster zone at the time of the hurricane.

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The period for eligible wages are as follows:

  • Harvey: Aug. 23, 2017 to Jan. 1, 2018
  • Irma: Sept. 4, 2017 to Jan. 1, 2018
  • Maria: Sept. 16, 2017 to Jan. 1, 2018

The Houston disaster zones include the following counties: Aransas, Austin, Bastrop, Bee, Brazoria, Calhoun, Chambers, Colorado, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Hardin, Harris, Jackson, Jasper, Jefferson, Karnes, Kleberg, Lavaca, Lee, Liberty, Matagorda, Montgomery, Newton, Nueces, Orange, Polk, Refugio, Sabine, San Jacinto, San Patricio, Tyler, Victoria, Walker, Waller, Wharton.


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