Self-Employed Sick Leave Credit
Under the Families First Coronavirus Response Act (FFCRA), eligible self-employed individuals will determine their qualified sick and family leave equivalent tax credits with the new IRS Form 7202, Credits For Sick Leave And Family Leave For Certain Self-Employed Individuals.
These self-employed taxpayers will claim the tax credits on their 2020 Form 1040 for leave taken between April 1, 2020 and December 31, 2020, and on their 2021 Form 1040 for leave taken between January 1, 2021 and March 31, 2021.
Note that the American Rescue Plan Act of 2021, enacted March 11, 2021, amended and extended the tax credits (and the availability of advance payments of the tax credits) for paid sick and family leave for wages paid with respect to the period beginning April 1, 2021, and ending on September 30, 2021.
The FFCRA, passed in March 2020, allows eligible self-employed individuals who, due to COVID-19, are unable to work or telework for reasons relating to their own health or to care for a family member, to claim refundable tax credits to offset their federal income tax.
The credits are equal to either their qualified sick leave or family leave equivalent amount, depending on the circumstances.
For more information about calculating the qualified sick leave equivalent amount and the qualified family leave equivalent amount, check out these links:
- About Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals
- New IRS form available for self-employed individuals to claim COVID-19 sick and family leave tax credits under FFCRA
- Specific Provisions Related to Self-Employed Individuals
- IRS updates FAQs on paid sick leave credit and family leave credit