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:

• A credit against your portion of social security tax if you’re required to provide mandated paid leave to qualified employees
• An immediate refund for any excess credit

The amount of available credits varies depending on the employee’s reason for leave.

Credits could be worth up to:

• $5,110 over an aggregate 10 days if an employee is sick or required to self-quarantine as a result of COVID-19
• $2,000 over the first 10 days if the employee needs to care for a sick family member or child due to closed schools
• $10,000 for an additional 50 days if the employee needs to care for family or children

For more information on relief strategies and guidance related to COVID-19, please visit our dedicated web page.

Additional Relief Credit Eligibility

In addition to mitigating the impacts of COVID-19, your business could qualify for a disaster relief tax credit under the following criteria:

• Located in a designated disaster zone not including COVID-19 disaster zones
• 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; this doesn’t include eligible wages under the ERTC, WOTC, or other wage-based tax credits

Qualified Disasters and Designated Disaster Zones

Impacts from several qualified disasters in the United States are eligible for the credit, including:

• Hurricane Dorian (2019)
• Hurricanes Florence and Michael (2018)
• California wildfires (2018, 2020)
• Hurricanes Harvey, Irma, and Maria (2017)
• Hurricanes Sally, Laura, Zeta (2020)
• Oregon wildfires (2020)

Current US Regions with Designated Disaster Zones

To learn if your company qualifies for the credit, please fill in the below form.

A Moss Adams professional will respond shortly with a list of disaster credits for which you’re potentially eligible as well as next steps to claim them.