COVID-19 Relief for Self-Employed: Tax Credits for Sick & Family Leave
If you’re self-employed and impacted by COVID-19, there’s good news! You may be eligible for tax credits to offset lost income due to illness or family care needs. Here’s a quick rundown:
What: The Families First Coronavirus Response Act (FFCRA) provided tax credits for some self-employed individuals who couldn’t work due to COVID-19.
Who’s eligible: You might qualify if you were unable to work or telework for any of these reasons:
- Your own COVID-19 infection or quarantine
- Caring for a family member with COVID-19
- School or childcare closures due to COVID-19
What you can get: Credits cover sick leave and family leave:
- Sick leave: Up to $5,110 in credit for your own illness, capped at your regular pay per day.
- Family leave: Up to $12,000 for caring for a family member, capped at 2/3 your regular pay per day.
Important notes:
- These credits apply to leave taken between April 1, 2020 and September 30, 2021.
- You’ll need to claim the credits on your tax return (Form 7202 for 2020, Form 1040 for 2021).
- There are limitations and specific regulations, so check the IRS website for complete details: https://www.irs.gov/newsroom/tax-credits-for-paid-leave-under-the-american-rescue-plan-act-of-2021-overview
Remember, this is just a brief overview. For accurate information and eligibility checks, visit the IRS website or consult a tax professional.
Stay safe and healthy!