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2017 Disaster Relief Act: Employee Retention Tax Credit Description and Qualifications

The U.S. Congress has passed a package of tax relief measures In the wake of the recent hurricanes that have impacted the United States and Puerto Rico. The Disaster Tax Relief and Airport and Airway Extension Act were put in place to assist individuals and businesses that were adversely affected by the storms.

The bill was signed into law on September 29, 2017.

Included in the relief measures is an Employee Retention Credit for employers who continued to pay eligible employees during a period of inoperability as a result of damage sustained by the recent hurricanes.

The amount of the credit is 40% of qualified wages on up to $6,000 in wages paid to each eligible employee during the period of inoperability.

To be eligible, the employer must have conducted an active trade or business in the disaster area of each storm and must have been inoperable on any day after the effective date of the storm and before January 1, 2018 as a result of damage sustained by reason of the storms.

The effective dates of each storm are as follows:

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

An “eligible employee” for purposes of the Employee Retention Credit is an employee whose principal place of employment on the date of the respective storm was in the hurricane disaster area.

For More Information

Please contact your PDR tax advisor to see if you qualify, or have any questions.

For a more detailed outline of the Disaster Relief Act, check out the this AccountingWEB Article

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