The HIRE CREDIT Act would expand the Work Opportunity Tax Credit (WOTC) program by adding a new category: “displaced disaster victim.” Employers could claim WOTC for hiring individuals who were displaced due to a federally declared disaster and who meet specific eligibility criteria. The displaced disaster victim must be certified by a designated local agency as having a principal residence in a qualified disaster zone, having been employed in that zone at a location made inoperable by the disaster, and being unemployed. The hiring must occur within one year after the incident period. If the employee’s principal place of employment is outside the disaster zone, the employer cannot count wages for weeks in which the employee works 30+ hours. A “qualified disaster zone” is a area declared a major disaster after January 1, 2024, and determined to warrant federal assistance. The effective date applies to workers who begin work on or after January 1, 2024. Transition rules exist for disasters whose incident period ends before enactment. In short, the bill aims to boost employment in disaster-affected communities by broadening the WOTC to include workers displaced by disasters, with careful timing and zone-based eligibility rules to target support where federal aid is already triggered.
Key Points
- 1Adds “displaced disaster victim” as a new WOTC-eligible category under Internal Revenue Code Section 51(d).
- 2Eligibility criteria for a displaced disaster victim:
- 3- Certified by a designated local agency as having a principal residence in a qualified disaster zone.
- 4- Employed in the disaster zone at a location made inoperable by the disaster immediately prior to the incident.
- 5- Currently in a period of unemployment.
- 6Temporary status:
- 7- The hiring must occur within one year after the last day of the incident period for the disaster.
- 8Wage eligibility rule:
- 9- If the employee’s principal place of employment is outside the disaster zone, the employer cannot count wages for weeks in which the employee works 30+ hours.
- 10Definition of qualified disaster zone:
- 11- An area where a major disaster was declared after January 1, 2024, by the President under the Stafford Act.
- 12- The area must also be determined to warrant federal assistance for the disaster.
- 13Qualified disaster and incident period:
- 14- “Qualified disaster” is the disaster causing the major disaster.
- 15- “Incident period” is the FEMA-defined period when the disaster occurred (not treated as starting before January 1, 2024 for purposes of this provision).
- 16Effective date and transition:
- 17- Applies to individuals who begin work on or after January 1, 2024.
- 18- Transition rules adjust for disasters whose incident period ends before the Act’s enactment.