Disaster Relief Tax Credit

If your business became inoperable during the COVID-19 pandemic or sustained damage from a hurricane, wildfire, or other qualified event, you may qualify for disaster relief tax credits.

Determining the appropriate credits to pursue — and navigating the claims process — without guidance can be a complex process that drains precious time and resources, especially as you work to recover from the event’s impact.

Our professionals can provide guidance and assist you with claiming disaster relief credits so you can focus on getting your business back on track and planning for the future.

COVID-19 relief and payroll credits

Several relief initiatives in response to the pandemic offer payroll credit options to certain employers.

Employee retention tax credit (ERTC)

If you kept employees on payroll during the pandemic, you could be eligible for a retention credit against your portion of social security tax if your business:

• Fully or partially suspended operations due to a qualifying government order
• Had a measurable reduction in gross receipts

Depending on your number of full-time employees, you may generate a credit based on qualified wages and health plan expenses paid to qualified employees during the impact period.

Qualified wages don’t include the wages used to calculate the work opportunity tax credit (WOTC) or other wage-based tax credits.

You could also be eligible for an immediate refund for any excess credit worth up to:

• $5,000 per eligible employee during 2020
• $28,000 per eligible employee during 2021

Subsequent legislation also granted Paycheck Protection Program (PPP) loan recipients eligibility to claim the ERTC retroactively and prospectively to the extent the wages weren’t paid using forgivable PPP proceeds.

Paid sick and family leave credits

If your business has less than 500 full- and part-time employees, it could be eligible for: