Disaster Relief Tax Credit

Did your business become inoperable after sustaining damage from a hurricane, wildfire, or other qualified disaster? If so, you may be entitled to a tax credit.

Eligibility

Your business may qualify for a disaster relief tax credit if it meets the following criteria:

  • Located in a designated disaster zone
  • Retained employees during a recovery period despite becoming inoperable
  • Continued to pay employees unable to perform services during a qualified disaster or relocated employees to other locations to resume their work

Qualified Disasters

Here are a few qualified disasters for which the credit is available and a reference list of US regions with designated disaster zones:

  • Hurricanes Florence and Michael
  • California wildfires
  • Hurricanes Harvey, Irma, and Maria

Designated Disaster Zones

Following is a reference list of US regions with designated disaster zones:

Hurricane Florence

Beginning September 13, 2018, businesses operating in the following counties in Carolina and Virginia are eligible to receive the credit.

North Carolina Counties

Allegany, Alamance, Anson, Ashe, Beaufort, Bertie, Bladen, Brunswick, Cabarrus, Carteret, Chatham, Columbus, Craven, Cumberland, Dare, Davidson, Duplin, Durham, Granville, Greene, Guilford, Harnett, Hoke, Hyde, Johnston, Jones, Lee, Lenoir, Madison, McDowell, Montgomery, Moore, New Hanover, Onslow, Orange, Pamlico, Pender, Person, Pitt, Polk, Randolph, Richmond, Robeson, Rowan, Sampson, Scotland, Stanly, Tyrrell, Union, Wayne, Wilson, and Yancey  

South Carolina Counties

Berkeley, Calhoun, Charleston, Chesterfield, Clarendon, Colleton, Darlington, Dillon, Dorchester, Florence, Georgetown, Horry, Jasper, Lancaster, Marion, Marlboro, Orangeburg, Sumter, and Williamsburg  

Virginia Counties

Botetourt, Charles City, Chesterfield, Craig, Floyd, Franklin, Grayson, Halifax, Henry, Isle of Wight, King and Queen, King William, Lancaster, Lunenburg, Mathews, Mecklenburg, Nelson, Northumberland, Nottoway, Patrick, Pittsylvania, Pulaski, Russell and Roanoke Counties and the Independent Cities of Bristol, Danville, Franklin, Hampton, Martinsville, Newport News, Richmond, and Williamsburg 

Hurricane Michael

As of October 7, 2018, businesses operating in the following counties in Alabama, Florida, and Georgia are eligible to receive the credit.

Alabama Counties

Geneva, Henry, Houston, and Mobile 

Florida Counties

Bay, Calhoun, Franklin, Gadsden, Gulf, Hamilton, Holmes, Jackson, Jefferson, Leon, Liberty, Madison, Okaloosa, Suwannee, Taylor, Wakulla, Walton, and Washington 

Georgia Counties

Appling, Atkinson, Bacon, Baker, Ben Hill, Berrien, Bleckley, Brooks, Bulloch, Burke, Calhoun, Candler, Chattahoochee, Clay, Coffee, Colquitt, Cook, Crawford, Crisp, Decatur, Dodge, Dooly, Dougherty, Early, Echols, Emanuel, Evans, Glascock, Grady, Hancock, Houston, Irwin, Jeff Davis, Jefferson, Jenkins, Johnson, Jones, Laurens, Lee, Macon, Marion, Miller, Mitchell, Montgomery, Peach, Pulaski, Putnam, Quitman, Randolph, Schley, Screven, Seminole, Stewart, Sumter, Tattnall, Telfair, Terrell, Thomas, Tift, Toombs, Treutlen, Turner, Twiggs, Washington, Webster, Wheeler, Wilcox, Wilkinson, and Worth 

California Wildfires

Beginning July 23, 2018, businesses operating in the following counties in California are eligible to receive the credit.

California Counties

Butte, Lake, Los Angeles, Shasta, Ventura 

Filing Requirements

There are no filing requirements for the credit, but businesses must meet the above criteria and maintain proof that the employees performed substantially all of their duties at the location up to the day the location became inoperable.

MaxCredits: Identify Available Credits

If your business is located in a designated disaster zone, we can help you determine your eligibility, claim the credit, and locate other federal and state hiring and wage-based credits.

To start, we’ll work with you to determine if your business qualifies. We’ll then do the following:

  • Collect and review the necessary documentation and payroll to determine each employees eligibility and identify limitations on wages used for other general business credits
  • Prepare a final report with details about claiming the credit on the appropriate schedule

In addition to calculating the disaster credit, MaxCredits has a web-based platform that can determine if your business qualifies for other federal hiring credits, including:

  • Work Opportunity Tax Credit
  • Employer Paid Family and Medical Leave Credit
  • State-level hiring credits

For more information, contact a Moss Adams professional.

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