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Katrina Tax Credit
- Published on Wed | 12 Oct 2005
HURRICANE KATRINA TAX CREDIT
On September 23, 2005 , the President signed into law the KATRINA EMERGENCY TAX RELIEF ACT OF
2005 (Public Law No: 109-73). This legislation extends the WOTC program by adding a special temporary
category for individuals impacted by Hurricane Katrina. The legislation also simplifies the process that em-ployers
need to follow in order to avail themselves of the tax credit.
The tax credit can reduce an employer’s federal tax liability by as much as $2,400 per new hire. To apply
for the credit, employers do not need to complete the standard required WOTC forms.
WHAT I S T H E T A X CREDI T F O R HURRICANE KATRI NA EMPLOYEES
It is a federal income tax credit that encourages employers to hire individuals who lived in the Hurricane
Katrina disaster area and lost their jobs due to Hurricane Katrina.
Employers that hire “ Hurricane Katrina Employees” for employment outside of the affected area can be
eligible for the tax credit if they hire Katrina impacted individuals who begin to work on or after August 29,
2005, and ending on December 31, 2005.
In the case of an individual who is being hired for a position that has a principal place of employment
within the Hurricane Katrina disaster area, the period of eligibility is extended until August 28, 2007.
WHICH I NDIVIDUALS QUALI F Y AN EMPLOYER FOR THE CREDI T
The credit applies to the following new hires:
1. Any individual who on August 28, 2005, had a principal place of abode (residence) in the core disas-ter
area and who is hired during the 2 year period beginning on such date for a position the principal
place of employment of which is located in the core disaster area, and
2. Any individual who on such date had a principal place of adobe (residence) in the core disaster area,
who is displaced from such abode (residence) by reason of Hurricane Katrina, and who is hired dur-ing
the period beginning on such date and ending on December 31, 2005. For more information please contact Amcheck at 888-AMCHECK.