Disaster tax credit for businesses

Disaster Relief Tax Credit

You may be entitled to a tax credit if your business became inoperable during the COVID-19 pandemic or sustained damage from a hurricane, wildfire, or other qualified disaster.

COVID-19 Payroll Credits

Several relief initiatives in response to COVID-19 offer payroll credit options to certain employers.

Employee Retention Credit

As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, employers could be eligible for a retention credit against their portion of the social security tax if they’ve retained and continue to pay wages to employees who are unable to work. This includes excess wages paid to employees paid full-time wages but only working part-time hours.

These employers could also be eligible for immediate refund for any excess credit worth up to $5,000 per eligible employee. Learn more.

Paid Sick and Family Leave Credits

Small employers with less than 500 full- and part-time employees could be eligible for a credit against their portion of the social security tax if they’re required to provide mandated paid leave to qualified employees under the Families First Coronavirus Response Act (FFCRA). They could also be eligible for an immediate refund for any excess credit. 

The available credit varies depending on the employee’s reason for leave. If an employee themselves is sick or required to self-quarantine as a result of COVID-19, the credit could be worth up to $5,110 over an aggregate 10 days

If the employee needs to care for a sick family member or child due to closed schools, the credit could be worth up to $2,000 over the first 10 days and up to $10,000 for an additional 50 days.

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

Disaster Relief Eligibility

In addition to COVID-19 impact, your business could qualify for a disaster relief tax credit if it meets the following criteria:

  • Located in a designated disaster zone
  • 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

Qualified Disasters and Designated Disaster Zones

As of December 20, 2019, impacts from several qualified disasters in the United States are eligible for the credit. Here are a few qualified disasters for which the credit is available, as well as a comprehensive reference map of all current US regions with designated disaster zones:

  • Hurricane Dorian (2019)
  • Hurricanes Florence and Michael (2018)
  • California wildfires (2018)
  • Hurricanes Harvey, Irma, and Maria (2017)

Eligible Locations

Disaster Relief Coverage Map

Find Out If You Qualify

To learn if your company qualifies for the credit, please fill in the below form. We’ll respond with a list of disaster credits you’re potentially eligible to receive as well as next steps you can take to claim them.

Filing Requirements

There are no filing requirements for the credit, but businesses must meet the above criteria and maintain proof that the employees performed substantially all of their duties at the location up to the day the location became inoperable.

MaxCredits: Identify Available Credits

If your business is located in a designated disaster zone or rendered inoperable due to COVID-19, we can help you determine your eligibility, claim the credit, and locate other federal and state hiring and wage-based credits.

To start, we’ll work with you to determine if your business qualifies. We’ll then conduct the following activities:

  • Collect and review the necessary documentation and payroll to determine each employees eligibility and identify limitations on wages used for other general business credits
  • Prepare a final report with details about claiming the credit on the appropriate schedule
  • Assist with filing refund claim if applicable

In addition to calculating the disaster credits, MaxCredits has a web-based platform that can determine if your business qualifies for other federal credits, including:

  • Work Opportunity Tax Credit
  • Employer Paid Family and Medical Leave Credit
  • State-level Hiring Credits

Insights


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Discover eligibility and other details about the employee retention tax credit (ERTC), the paid sick leave credit, and the paid family leave credit.

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Your business may qualify for disaster tax relief if it sustained damage from the California wildfires.

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Your business may qualify for disaster tax relief if it sustained hurricane damage during Harvey, Irma, or Maria.

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Learn how employers can provide tax-free relief to employees affected by California wildfires using qualified disaster relief payments.

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Californians who own property damaged by the recent wildfires may qualify for property tax relief.

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