Continuing the recent trend to provide federal income tax relief for certain wages paid during national disasters, businesses impacted by the California wildfires can receive a benefit similar to the tax credit in 2017 for businesses impacted by the hurricanes. Included within the recently signed H.R. 1892 - Bipartisan Budget Act of 2018 is the Employee Retention Tax Credit for Employers Affected by California Wildfires. This credit allows employers to claim a tax credit equal to 40% of the wages paid to an employee if the location of employment was in a core disaster area and that location was impacted by the wildfires. The credit is capped at $2,400 per employee. The credit applies to wages paid during the time that the business remained inoperable. The twelve California counties the Federal Emergency Management Agency (FEMA) deemed disaster areas include Orange, Los Angeles, San Diego, Santa Barbara, Ventura, Mendocino, Sonoma, Lake, Napa, Yuba, Butte, and Nevada.
Businesses that were or remain inoperable between October 8, 2017 and January 1, 2018 in Orange, Mendocino, Sonoma, Lake, Napa, Yuba, Butte, and Nevada counties may qualify for this employee retention tax credit.
Businesses that were or remain inoperable between December 4, 2017 and January 1, 2018 in Los Angeles, San Diego, Santa Barbara and Ventura counties may qualify for the employee retention tax credit.
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