New IRS Form Coming So Self-Employed Can Claim Leave

New IRS Form Coming So Self-Employed Can Claim Leave

09/25/2020 Tags: Announcements, In the News, COVID-19

If you’re self-employed and couldn’t work because of the coronavirus, you might be able to claim refundable tax credits for sick or family leave.

To claim those credits, you’ll need to attach a new form — Form 7202: Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals — to your 1040 or Form 1040-SR. Right now, the IRS form is a draft, and the tax agency hasn’t released instructions yet.

As a reminder, the Families First Coronavirus Response Act provided some refundable sick and family leave credits against the self-employment tax. The credits only apply from April 1, 2020, through Dec. 31, 2020.

Just like employees, the self-employed have to meet six criteria to claim the leave credits.

In addition to those six requirements, someone who’s self-employed must have been unable to work or perform whatever services they offer on the days they’re seeking credit for. It’s possible the IRS would review your business records and billing statements to make sure you didn’t work on any of the days you’re asking for leave credit.

If you need help navigating COVID credits or have other questions about your financial situation, please reach out to us.

This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.

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