The Family First Coronavirus Response Act – or FFRCA – provides two important tax credits geared toward the self-employed to help cover the cost of taking time off due to COVID-19. While most of the text in these laws apply to businesses with employees, it also applies to self-employed individuals.
The tax credit for paid sick leave applies to eligible self-employed taxpayers who are unable to work (including telework or working remotely) due to:
- Being subject to a federal, state, or local quarantine or isolation order due to COVID-19.
- Being advised by a health care provider to self-quarantine due to COVID-19.
- Experiencing COVID-19-related symptoms and seeking a medical diagnosis.
If you meet all the requirements, you would be eligible for qualified sick leave for each day during the year that you were unable to work for the above reasons (up to 10 days). The tax credit is worth the lesser of
- $511 per day or
- 100% of your average daily self-employment income for the year per day.
The only days that may be considered – for tax year 2020 – in determining the qualified sick leave equivalent amount are days occurring during the period beginning on April 1, 2020 and has been extended to the period ending on March 31, 2021.
Under the expanded Family and Medical Leave Act – FMLA – provision of the FFCRA, you would be eligible for qualified family leave for each day that you were unable to work because:
- You were caring for someone else impacted by COVID-19 (up to 10 days); or
- Your child’s school or childcare provider was closed or unavailable due to COVID-19 (up to 50 days).
You can claim a tax credit for the lesser of $200 per day or 67% of your average daily self-employment income for the year per day.
Dunham Tax Professionals wants to remind you that you’re not in this alone: it’s always advisable to consult a professional if you have any questions. We’re here to help. Contact us or schedule a consultation today.