Gulf Coast Companies Receive Tax Break
March 2, 2006--In addition to other emergency tax breaks, many small businesses in the Gulf Coast region are now eligible for a recently expanded employee tax credit program, according to the Internal Revenue Service.
The Work Opportunity Tax Credit, which normally provides incentives for businesses to hire workers from groups with traditionally high unemployment rates -- such as ex-felons and high-risk youths -- was recently expanded to include victims of Hurricane Katrina, the IRS said. The credit reduces an employer's federal tax liability by as much as $2,400 per hire.
The credit is available through the Katrina Emergency Tax Relief Act of 2005, and limited to businesses with fewer than 200 employees that operated in regions affected by the August 2005 storm.
To obtain the credit, employers must provide "reasonable evidence" that a worker had a main residence and job in the core disaster area, according to the IRS.
The agency is also extending the filing deadline to Aug. 28, 2006, for individuals and businesses in the region's hardest hit parishes and counties, including Cameron, Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, and St. Tammany in Louisiana, and Hancock, Harrison, and Jackson in Mississippi.
Those outside these areas, but who were severely impacted by the storm, are being told to write "Hurricane Katrina" in red ink at the top of their return to indicate the need for an extension.
Other recent tax breaks and incentives for small businesses in the Gulf Coast region include a doubling of expense deductions to $200,000, a special bonus depreciation, a deduction for demolition and clean-up costs, and a credit for housing employees.