Hurricanes Harvey, Irma and Maria: 9 Financial Options
9 Financial Opportunities for Disaster Victims of Hurricane Harvey, Hurricane Irma & Hurricane Maria: Small Business Administration (SBA) loans, grant money, employer credits, charitable contributions and relaxed restrictions on accessing your retirement funds for assistance with building back your life.
I am a Hurricane Sandy victim and survivor. My home and office are located on a beach block in Rockaway Queens, New York. Our street became a river and I watched as a wave broke through my office door, instantly filling my office with 6 feet of ocean water. Once power was restored my temporary office became a sanctuary for our clients and neighbors as my staff and I navigated the regulations; we became experts in casualty losses and helped many of our clients, neighbors and local accountants obtain grants, real estate tax reductions, necessary support documents, insurance adjusters, appraisers, and prepared casualty loss documentation and casualty loss schedules and tax returns. Please visit our website for assistance with planning and/or reporting of casualty related issues http://aparnesscpa.com/services/casualty-loss-victims/.
It’s been 2 months since Hurricane Harvey, Hurricane Irma and Hurricane Maria hit, changing lives forever. The Disaster Tax Relief and Airport and Airway extension Act of 2017 signed into law on September 29th offers specific disaster victims alternative methods of obtaining short term money.
#1 Small Business Administration Loans: It may not be in your best interest to apply for these as other grants and programs may be established which you would be precluded from if you have an SBA loan. Individuals with good credit are given loans at a higher interest rate. The SBA loan is a mortgage collateralized by your home.
#2 The Disaster Tax Relief and Airport and Airway extension Act of 2017 has relaxed the rules for distributions from retirement plans if your home was in the affected area. The distribution repayment is expanded from 60 days to 3 years, with no tax withholding required. It also permits individuals to recontribute funds to retirement plans if the funds were distributed for a home purchase in a hurricane disaster area that was cancelled on account of the hurricanes (between February 28 and September 21, 2017).
#3 The Disaster Tax Relief and Airport and Airway extension Act of 2017 has relaxed the rules for loans from retirement plans. The loan limits have been increased from $50,000 to $100,000, limited to 100% of the present value of accrued benefits. In addition, there is a one year repayment deferral along with a five year repayment.
#4 Employee retention tax credit: Employers are allowed to take a credit of up to 40% of wages paid per employee maximum of $6,000 of wages and $2,400 of credits per employee through the day that the business began operations again (but no later than January 1, 2018). Note that there is no requirement that the employee actually worked.
#5 Employer qualified disaster relief payments: This applies to grant-like payments made by employers for unreimbursed medical, temporary housing and transportation expenses of employees who are affected due to an incident that is a presidentially declared disaster. These are deductible by the employer but non-taxable to the employee under code section 139 of the Internal Revenue Service.
#6 Make sure to keep copies of all grant letters as Federal, State and Local Government payments will not be considered income when specifically designated for medical, temporary housing and transportation expenses. This means that a portion of funds received from agencies like FEMA may be designated as living expenses and not considered taxable income.
#7 Charitable qualified contributions prior to December 31, 2017– are not limited by income as long as they are for relief efforts in the hurricane disaster areas. (Qualified contributions must also be substantiated, with a contemporaneous written acknowledgement that the contribution was/is to be used for relief efforts).
#8 Federal Dislocated Worker Grants: Disaster relief employment pertains to projects that provide food, clothing, shelter and other humanitarian assistance for disaster victims and projects that involve demolition, cleaning, repair, renovation and reconstruction of damaged structures and facilities. Individuals who qualify for disaster relief employment are people who are temporarily or permanently laid off as a consequence of the disaster, dislocated workers, and individuals who are long-term unemployed.
#9 The Florida Small Business Emergency Bridge Loan Program provides cash flow to businesses damaged by a disaster. The short-term, interest-free loans help bridge the gap between the time damage is incurred and when a business secures other financial resources, including payment of insurance claims or longer-term Small Business Administration loans. Go to www.floridadisasterloan.org for more information.
Please watch for my next post which relates specifically to the relaxed rules on deducting casualty losses sustained from Hurricane Harvey and Hurricane Irma.