27 Feb Are you missing a big IRS refund as self employed

The Family First Coronavirus Response Act provides for big refundable tax credit for Sick Leave and Family Leave for certain self employed individuals.  It is not too late to avail of this refundable tax credit even if you have already filed your tax returns.  We can help you amend your tax return to avail yourself of this credit.  You may be able to claim a refundable tax credit of an average of $7000 or a maximum of $32.000 depending on your net earnings.

To figure refundable qualified sick and family leave equivalent credits if you were unable to perform services as an eligible self-employed individual due to certain COVID-19 related circumstances between January 1, 2021, and September 30, 2021 you need to use Form 7202.  This credit is available if you are an eligible individual who was unable to work or had to care for family members due to the coronavirus (COVID-19).

The form is broken down into two portions: qualified sick leave and qualified family leave for self-employed individuals. 

1. The “qualified sick leave“ equivalent amount is the lesser of the following:
   • 100% of the average daily self-employment
   • Income or
   • $511
   • Taxpayer can elect to use 2020 self-employment income to calculate average daily self-employment income
   • The maximum number of days that this credit can be taken is 10 (minus any days already claimed in 2020) during the first benefit period and 10 during the second benefit period.
2. The “qualified family leave” equivalent amount is the lesser of the following:
   • 67% of the average daily self-employment income, or
   • $200
   • As with sick leave, Taxpayer can elect to use 2020 self-employment income to calculate average daily self-employment income
   • The maximum number of days that this credit can be taken is 50 (minus any days already claimed in 2020) during the first benefit and 60 during the second benefit period. 

Note:       If you are a self employed and need more information about this benefit you may schedule a consultation with our CPA and Attorney.  The above information is for educational presentation only and not a legal advice.