COVID-19 Sick and Family Leave Tax Credits for Self-Employed

Posted On: Tuesday, June 7, 2022

The Families First Coronavirus Response Act provided small and midsize employers with refundable tax credits to cover the cost of providing paid sick and family leave to employees affected by COVID-19.

If you are a self-employed individual who could not work as a result of either you or your family being affected by COVID-19, there may be significant tax credits available to you.

The Families First Coronavirus Response Act provided small and midsize employers with refundable tax credits to cover the cost of providing paid sick and family leave to employees affected by COVID-19.

Self-employed individuals (including 1099 contractors, sole proprietors, LLCs, and partners in partnerships) can also claim these credits on their 2021 tax returns using IRS form 7202.

The act includes two types of credits.

Sick Leave – Available to qualified self-employed individuals who were unable to work because they were:

  • Subject to federal, state, or local quarantine or isolation orders
  • Advised by a health care provider to self-quarantine
  • Experiencing symptoms of COVID-19 and seeking a medical diagnosis

For the period 1/1/21 – 3/31/21, the maximum credit available is 10 days at $511 per day totaling $5,110 (the maximum number or days is reduced by any credit taken in 2020).

For the period 4/1/21 – 9/30/21, the maximum credit available is also 10 days at $511 per day totaling an additional $5,110.

Family Leave – Available to qualified self-employed individuals who were unable to work because they were caring for a son or daughter whose school was closed or whose childcare provider was unavailable due to COVID-19.

For the period 1/1/21 – 3/31/21 the maximum credit available is 50 days at $200 per day totaling $10,000 (the maximum number of days is reduced by any credit taken in 2020).

Family Leave – Available to qualified self-employed individuals who were unable to work because they were:

  • Caring for an individual subject to federal, state, or local quarantine orders
  • Caring for an individual advised by a health care professional to self-quarantine
  • Caring for a son or daughter because their school or place of care was closed
  • Accompanying an individual to obtain immunization
  • Caring for an individual recovering from any condition related to immunization

For the period 4/1/21 – 9/30/21 the maximum credit available is 60 days at $200 per day totaling an additional $12,000.

As you can see, there are significant tax credits available for qualified self-employed individuals who have been impacted by COVID-19.

What about self-employed individuals who qualified for these credits but were not aware of them prior to filing their 2021 returns? Taxpayers have the ability to file an amended return within three years of the date the original return was filed.

To learn more about tax credits available to self-employed individuals contact a tax specialist at Rakatansky, Rakatansky, & Associates. We are an experienced multifaceted CPA and financial advisory firm providing tax planning, tax preparation, accounting, and legal services to individuals, businesses, trusts, and estates throughout New England.