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FAQs for Hurricane Victims - Work Opportunity Tax Credit

FAQs for Victims of Hurricanes Katrina, Rita and Wilma, and Victims of the Midwestern Area Disasters of 2008

(03/09) Q: If an individual transfers from one corporation to another corporation in the core disaster area within the same parent company, can that individual be treated as a Hurricane Katrina employee by each corporation?

A: Rules pertaining to related entities for purposes of the WOTC are in Internal Revenue Code section 52. Thus, the corporations will need to determine whether their employees are treated under section 52 as employed by a single employer. If they are, the corporations' combined credit with respect to an individual employed by both corporations is limited to $6,000.  In addition, wages taken into account are those paid to the individual by either corporation for services rendered during the one-year period beginning on the day the individual began work for the first corporation.  If the corporations are not treated under section 52 as a single employer, each of the corporations can claim a separate credit of up to $6,000 with respect to the same individual, provided each corporation claiming the credit meets all the applicable requirements.

The Heartland Tax Relief Act of 2008 made the WOTC available to affected taxpayers located in the Midwestern Disaster Areas identified in Table 1 of  Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas.    

(7/17/06) Q: Is an employee hired after August 27, 2005, to work on an offshore site eligible to be a Hurricane Katrina employee for purposes of the WOTC?

A: To be a Hurricane Katrina employee the individual must have had a principal place of abode in the core disaster area on August 28, 2005. The employee must also meet one of two additional requirements. Either the employee must be hired during the 2-year period beginning on August 28, 2005, to work principally in the core disaster area, or the employee must have been displaced from his or her abode because of Hurricane Katrina and must have been hired during the period beginning August 28, 2005, and ending December 31, 2005, to work anywhere. Thus, if an employee’s principal place of employment is located outside any county or parish designated as being part of the core disaster area (including at an offshore site, such as an oil rig in the Gulf of Mexico) the employee can be a Hurricane Katrina employee only if he or she was hired before January 1, 2006. If the principal place of employment is in the core disaster area, the employee can be a Hurricane Katrina employee if he or she is hired before August 28, 2007.

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Page Last Reviewed or Updated: 05-Sep-2013