Employee Retention Credit for Hurricanes Florence and Michael

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Employee Retention Credit for Hurricanes Florence and Michael

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The Further Consolidated Appropriations Act, 2020 which became law in December 2019 included employee retention credits related to Hurricanes Florence and Michael.  These credits apply to employers that paid their employees during these hurricane disasters in portions of North Carolina, South Carolina, Georgia and Florida.  The credit is 40% of the qualified wages (including Professional Employer Organization wages) up to $6,000.  This means that, per employee, an employer can create up to $2,400 of credits.

If a business is located in a disaster zone and was “inoperable” as a result of damage sustained by the hurricane, they are eligible to receive the credit for wages paid from the time they became “inoperable” until their “resumption of significant operations.”  We consider “resumption of significant operations” to mean when the business was back open and able to receive customers.  We have found that even if our clients were only closed for a couple of days to a week (maybe due to mandatory evacuations), there is value in the credit and we have been able to create a good ROI for clients on calculating and taking the credit.  As examples, we recently had one client with 32 employees that was closed and paid employees for 3 days qualify for a $9,300 credit, and another client with 80 employees that was closed and paid employees for 10 days receive a $30,000 credit.

If your business is located in one of the qualified disaster zone counties (see below), you were forced to close your business for some time as a result of Hurricanes Florence or Michael, and you paid your employees during the closure, you will likely qualify for this retention credit.  If you think you may qualify and would like to discuss your situation and potential credit, we are here to help.  Reach out to your WR Partner or your relationship manager.

Qualified wages for the credit must have been paid before the earlier of the date your trade or business resumed significant operations at that place, or the date 150 days after the last day of the incident period.  The qualified disaster zones are the following counties in SC, NC, GA, and FL.

For Hurricane Florence, SC counties include Chesterfield, Darlington, Dillon, Florence, Georgetown, Horry, Marion, and Marlboro, and the incident period started on September 8, 2018 and went through October 8th.

For Hurricane Florence, NC counties include Anson, Beaufort, Bladen, Brunswick, Carteret, Chatham, Columbus, Craven, Cumberland, Duplin, Durham, Greene, Guilford, Harnett, Hoke, Hyde, Johnston, Jones, Lee, Lenoir, Moore, New Hanover, Onslow, Orange, Pamlico, Pender, Pitt, Richmond, Robeson, Sampson, Scotland, Union, Wayne, and Wilson, and the incident period started on September 7, 2018 and went to September 29th.

For Hurricane Michael, GA counties include Baker, Calhoun, Clay, Crisp, Decatur, Dougherty, Early, Grady, Laurens, Lee, Miller, Mitchell, Randolph, Seminole, Sumter, Terrell, Thomas, Tift, Turner, and Worth, and the incident period started on October 9, 2018 and went to October 23th.

For Hurricane Michael, FL counties include Bay, Calhoun, Franklin, Gadsden, Gulf, Holmes, Jackson, Leon, Liberty, Taylor, Wakulla, and Washington, and the incident period started on October 7, 2018 and went to October 19th.