Disaster Zone Incentives and Hurricane Tax Relief Credit
Help when disaster hits.
Our clients say:
TCC does not miss a beat. They found a huge missed opportunity, twice!”
– VP, tax, Fortune 500 manufacturing
Helping Clients Get Back To Business
Knowing Your Options
The tax credits for businesses affected by hurricanes and wildfires and other disasters can be material, depending on a number of quantitative and qualitative factors.
Beyond the Legislation
H.R. 1865, the “Further Consolidated Appropriations Act, 2020” signed by the president on December 20, 2019 established parameters for claiming tax credits as part of disaster relief for federally designated disasters that occurred in 2018 and 2019. The tax credit is similar to the 2017 legislation for Hurricanes Harvey, Irma, Maria, and California wildfires. Businesses located in areas designated by FEMA for a certain level of relief whose operations were impacted by the disaster, and who continued to pay their employees during a period of inoperability are eligible to receive a retention credit for a portion of those wages. The definition of inoperability and instructions on how to measure the physical and economic impact of the disasters are not defined by the statute. TCC, utilizing our experience with previous disaster relief legislation, can assist impacted companies to capture this incentive.
Our first step with clients is to collaborate on choosing the appropriate metric for measuring operability. We look at operation levels heading into, during and coming out of the disaster as compared to when significant operations resumed. The key is to identify a metric that’s measurable and supportable with data.