As we all know by now, COVID-19 hit us hard in 2020 – and resulting shutdown mandates and furloughs meant that there was a lot we either did not or could not do: And maybe you’re self-employed, so you think that these shutdowns, furloughs, relief packages and tax breaks that keep coming down just don’t apply to you.
Being self-employed can have the perk of being your own boss and possibly setting your own hours, but you have other responsibilities, too: in 2020, those responsibilities may have also meant that you missed work to take care of kids because their schools or daycare were closed, or if you missed work to care for someone sick or quarantined – or you missed work because you were sick or quarantined due to COVID-19.
If you’re self-employed, the IRS has a tax credit for you: Form 7202 allows for self-employed individuals to claim COVID sick and family leave tax credits under the Families First Coronavirus Response Act – FFCRA.
So many of us are taking care of our kids, and also our parents and grandparents as well, and obviously financial support and tax breaks are sorely needed to recognize that financial hit that happens when those of us who are self-employed need to focus on caregiving.
The IRS has issued an intricate form with instructions on how to calculate the sick leave or family leave amount, but both the sick leave and family leave credits to start with a basic question: What is the number of days you were unable to perform services.
According to estimates from the National Alliance for Caregiving, during the past year, 65.7 million Americans – or 29 percent of the adult U.S. adult population involving 31 percent of all U.S. households – served as family caregivers for an ill or disabled relative. Keep in mind, that this in generally care that is largely unpaid and/or given at a loss of income otherwise earned.
Dunham Tax Professionals is committed to helping its clients navigate these new and much needed tax breaks and incentives. Please contact us and set up a consultation, today, so that we can help you receive the credit that you deserve.