Tax Extenders Have Been Renewed and New Disaster Relief Available
(Florence, SC – January 16, 2019) – On Friday, December 20, 2019, President Donald J. Trump signed into law the Further Consolidated Appropriations Act, 2020 (H.R. 1865). The Act includes a tax credit package that provides a one-year extension through 2020 to the Work Opportunity Tax Credit (WOTC), Indian Employment Credit (IEC), and Empowerment Zones (EZs). The amendment made in Section 51(c)(4) applies to individuals who begin work for employers after December 31, 2019.
- Work Opportunity Tax Credit (WOTC): A Federal tax credit, ranging from $1,200 – $9,600, that is available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment.
- Indian Employment Credit (IEC): A Federal tax credit for employers who hire registered Native Americans, referred to as “Native American Indians” or “American Indians” in Internal Revenue Service (IRS) documentation, and spouses of registered Native Americans, who live on or near a Native American reservation and work for an employer on that reservation.
- Empowerment Zones (EZs): An incentive to businesses located in an empowerment zone (EZ) to hire and retain employees who also live in the EZ. Businesses are eligible for a wage credit of up to $3,000 per eligible employee.
In addition to extending these tax credit programs, the spending package included a $2.5M increase in WOTC funding for FY 2020. The increase in funding was provided to help with the administration of the Work Opportunity Tax Credit, reduce backlog at the state level, and provide provision of technical assistance and staff training. The funding will also provide the resources needed to modernize administration of the program in those states that have not had the resources to do so.
Disaster relief for Hurricanes Florence and Michael, the 2018 California Wildfires, and other natural disasters was also included within the signed legislation, providing tax relief to victims and businesses located in federally designated disaster zones. Businesses located within a disaster zone may receive up to $2,400 in tax credits per retained employee. The credit, known as the Employee Retention Credit (ERC), is applicable to designated disaster zones for the following natural disasters:
- Alabama Severe Storms and Tornadoes (2018)
- Alabama Severe Storms, Straight-line Winds, and Tornadoes (2019)
- American Samoa Tropical Storm Gita (2018)
- Arkansas Severe Storms and Flooding (2019)
- California Wildfires (2018)
- California Wildfires and High Winds (2018)
- Florida Hurricane Michael (2018)
- Georgia Hurricane Michael (2018)
- Hawaii Kilauea Volcanic Eruption and Earthquakes (2018)
- Hawaii Severe Storms, Flooding, Landslides, and Mudslides (2018)
- Indiana Severe Storms and Flooding (2018)
- Iowa Severe Storms and Flooding (2019)
- Mississippi Severe Storms, Straight-line Winds, Tornadoes and Flooding (2019)
- Missouri Severe Storms, Tornadoes, And Flooding (2019)
- Nebraska Severe Winter Storm, Straight-line Winds, and Flooding (2019)
- North Carolina Hurricane Florence (2018)
- North Carolina Tornado and Severe Storms (2018)
- Northern Mariana Islands Super Typhoon Yutu (2018)
- Northern Mariana Islands Typhoon Mangkhut (2018)
- Ohio Severe Storms, Straight-line Winds, Tornadoes, Flooding, Landslides, and Mudslide (2019)
- Oklahoma Severe Storms, Straight-line Winds, Tornadoes, And Flooding (2019)
- South Carolina Hurricane Florence (2018)
- South Dakota Severe Storms, Tornadoes, And Flooding (2019)
- South Dakota Severe Winter Storm, Snowstorm, and Flooding (2019)
- Texas Severe Storms and Flooding (2018)
- Texas Severe Storms and Flooding (2019)
- Texas Tropical Storm Imelda (2019)
- Wisconsin Severe Storms, Tornadoes, Straight-line Winds, Flooding, and Landslides (2018)
The Employee Retention Credit, available to employers of all sizes, is calculated based on the number of days your business was disrupted as well as the number of days it took to return to significant operations post disaster. The credit can be carried back one year and forward 20 years and cannot be taken on the same wages used to calculate the WOTC program for an eligible employee for the same period.
For more information on how to take advantage of these valuable tax credits, please contact Synergi Partners.
About Synergi Partners
Comprising of tax credit veterans with many years of experience serving clients of all sizes and in virtually all industries, Synergi Partners specializes in helping employers take advantage of federal and state tax credit programs, as well as disaster relief incentives.
With an executive team made up of thought leaders who have made significant contributions to the tax incentives industry, Synergi Partners’ main goal is to provide the best service available and to achieve maximum value for its clients.