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Hurricane Sandy Tax Relief Proposal on the Horizon

Help On The Way
Senator Charles Schumer (D-NY) and Senator Robert Menendez (D-NJ) will introduce legislation to reduce taxes for individuals and businesses in the Hurricane Sandy Disaster Areas. Click here to review a recent press release highlighting the key points of the tax benefits.

The proposal, among other things, calls for a hiring incentive of 40% of the first $6,000 wages paid for individuals who lived in the “core disaster area” on October 27, 2012 and (i) are hired to work in a business located in the area on or after that date but before October 27, 2014 or (ii) were displaced by the hurricane and hired between October 27, 2012 and January 1, 2013.

The incentive would also apply with respect to individuals displaced by the hurricane and who are hired elsewhere, but the duration of that benefit will be much shorter. A retention credit also will be offered for disaster-damaged businesses that continued to pay their employees after 10/27/2012 even though such businesses were inoperable (likely to mean a reduction of more than 20% in sales or volume).

The retention credit also is proposed to be set at 40% of the first $6,000 wages paid relating to the period the business was inoperable (but not past March 1, 2013). The details are being worked on by the technical tax staffs in the Senate Finance Committee. ADP Tax Credit Services has learned the proposed legislation will generally mirror the eligibility documentation requirements included in the Hurricane Katrina program.

Other tax benefits include deductions for repair related expenses, penalty-free borrowing from retirement accounts and a host of others. The sponsors are hoping to gain enactment of the legislation in a year-end tax deal, or at the latest, in a hurricane relief bill that would be taken up in January.

Learn more about leveraging tax credits and incentives with help from ADP.


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