TAX ALERT - Employee Retention Credit for Employers Affected By Hurricanes Harvey, Irma, and Maria

If you are an employer and had to close your trade or business during Hurricane Irma and you kept your employees on the payroll during the close down period, you may get a credit against your federal income tax. 
 
Consequent to the recent natural disasters, Congress enacted the Disaster Tax Relief and Airport and Airway Extension Act of 2017, Public Law 115-63, which provides a tax relief for victims of Hurricanes Harvey, Irma, and Maria in the form of a tax credit against the taxpayer's income tax.
 
Employee Retention Tax Credit Overview
This Law provides a credit against income tax for employers who had to shut down their business due to the recent hurricanes but kept employees on the payroll. 
 
In general, the credit is calculated based on 40 percent of wages, not exceeding $6,000 per employee during the closure period, paid or accrued on any day after September 4, 2017, until the earlier of (1) the date the business resumed significant operations or (2) December 31, 2017.
 
Exceptions
Owners, shareholders, and partners are not included in the tax relief.
 
S Corps and Partnerships
Shareholders and Partners of S Corps and partnerships are entitled to the employee retention credit based on their respective distributive share for the tax credit. 
 
Remarks:
Certainly, all of Florida was affected by Hurricane Irma, and many of our clients and friends had to close operations for a period of time in preparation, during, and after the storm. If you were a qualified employer per the above references, you might be entitled to the employee retention credit. For calculation of the credit, and the way to claim your credit, please reach out to your MSL Tax Team:

Kurt  A. Alter, CPA
Tax Shareholder
kalter@mslcpa.com
      
Harry E. Harp, CPA
Tax Manager
eharp@mslcpa.com
      
José Esquerdo
Tax Manager
jesquerdo@mslcpa.com 
      
Norman Neal, CPA
Tax Supervisor
nneal@mslcpa.com