In our last blog, we talked a bit about the term “qualified” as it pertains to eligibility for the tax credits for the self -employed as provided under the Families First Coronavirus Act – FFCRA – provision of the FMLA, which everyone is reasonably aware of as the Family Medical Leave Act.
So, what exactly is “qualified”?
As always, we here at Dunham Tax Professionals want to remind you the importance of documenting everything. The bottom line with the IRS is: “Can you prove it?” so, if it happened, make sure there’s a record of it.
As a reminder, you should know that this credit applies to an eligible self-employed individual who is unable to work or telework because the individual:
- Is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- Has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or
- Is experiencing symptoms of COVID-19 and seeking a medical diagnosis,
or an eligible self-employed individual who is unable to work or telework because the individual:
- Is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- Is caring for a child if the child’s school or place of care has been closed, or childcare provider is unavailable due to COVID-19 precautions; or
- Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor,
How These Amounts are Calculated:
Average daily self-employment income is an amount equal to the net earnings from self-employment for the taxable year, or prior taxable year, divided by 260. A taxpayer’s net earnings from self-employment are based on the gross income that he or she derives from the taxpayer’s trade or business minus ordinary and necessary trade or business expenses.
That means that if you experienced symptoms yourself and had to quarantine, you would be able to claim $511 per day for a maximum of ten days, for a total of $5110; if you were on leave to care for someone else that number is capped at $200 for the same ten days, capping out at $2000.
Now for the Family Leave, amount of days is $200 per day for up to 50 days and the maximum amount is capped at $10,000. And the way all our schools and daycares have been closed either sporadically or consistently this past year, there should be no issue with qualifying for these days
As always, Dunham Tax Professionals is here to guide you through tax season and beyond. We’ve got the answers you need, so contact us today.