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(2) in the case of an individual who is being
hired for a position the principal place of employ-
ment of which is located in a Hurricane Katrina dis-
aster area, for any employer during the 2-year period
beginning on such date.
SEC. 202. EMPLOYEE RETENTION CREDIT FOR EMPLOYERS
AFFECTED BY HURRICANE KATRINA.
(a) IN GENERAL.—In the case of an eligible employer,
there shall be allowed as a credit against the tax imposed
by chapter 1 of the Internal Revenue Code of 1986 for the
taxable year an amount equal to 40 percent of the qualified
wages with respect to each eligible employee of such em-
ployer for such taxable year. For purposes of the preceding
sentence, the amount of qualified wages which may be taken
into account with respect to any individual shall not exceed
$6,000.
(b) DEFINITIONS.—For purposes of this section—
(1) ELIGIBLE
EMPLOYER.—The term ‘‘eligible
employer’’ means any employer—
(A) which conducted an active trade or
business on August 28, 2005, in a Hurricane
Katrina disaster area, and
(B) with respect to whom the trade or busi-
ness described in subparagraph (A) is inoperable
on any day after August 28, 2005, and before
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January 1, 2006, as a result of damage sus-
tained in connection with Hurricane Katrina.
(2) ELIGIBLE
EMPLOYEE.—The term ‘‘eligible
employee’’ 
means 
with 
respect 
to 
an 
eligible
employer—
(A) an employee whose principal place of
employment on August 28, 2005, with such eligi-
ble employer was in a Hurricane Katrina dis-
aster area, or
(B) a Ready Reserve-National Guard em-
ployee of such eligible employer who is per-
forming qualified active duty and whose prin-
cipal place of employment immediately before
the date on which such employee began per-
forming such qualified active duty was in a
Hurricane Katrina disaster area.
(3) QUALIFIED
WAGES.—The term ‘‘qualified
wages’’ means wages (as defined in section 51(c)(1) of
the Internal Revenue Code of 1986, but without re-
gard to section 3306(b)(2)(B) of such Code) paid or
incurred by an eligible employer with respect to an
eligible employee on any day after August 28, 2005,
and before January 1, 2006, which occurs during the
period—
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(A) beginning on the date on which the
trade or business described in paragraph (1)
first became inoperable at the principal place of
employment of the employee immediately before
Hurricane Katrina, and
(B) ending on the date on which such trade
or business has resumed significant operations at
such principal place of employment.
Such term shall include wages paid without regard to
whether the employee performs no services, performs
services at a different place of employment than such
principal place of employment, or performs services
at such principal place of employment before signifi-
cant operations have resumed.
(4) READY
RESERVE-NATIONAL
GUARD
EM-
PLOYEE.—The term ‘‘Ready Reserve-National Guard
employee’’ means an employee who is a member of the
Ready Reserve of a reserve component of an Armed
Force of the United States as described in section
10142 and 10101 of title 10, United States Code and
who is performing qualified active duty.
(5) QUALIFIED ACTIVE DUTY.—The term ‘‘quali-
fied active duty’’ means—
(A) active duty, other than the training
duty specified in section 10147 of title 10,