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Self-Employed and Credit for Sick and Family Leave for Tax Year 2020

The credits created under the Family First Coronavirus Response Act that apply to employers with under 500 employees whose employees take sick and/or family leave due to COVID-19 also apply to self-employed individuals.

To be eligible, an individual must be conducting a business that qualifies as self-employment income and be eligible to receive qualified sick or family leave wages under the Emergency Paid Sick Leave Act or the Emergency Family and Medical Leave Expansion Act as if the individual was an employee.

The credits are refundable and cover leave taken between April 1, 2020 and December 31, 2020.

Credit for Sick Leave
Under this credit, you may claim up to 10 days if the individual was unable to perform services as a self-employed individual due to COVID-19 related reasons or if the individual was caring for another individual because of COVID-19 related reasons.

The credit amount for Sick Leave is:

  • For Individual themselves – $511 per day
  • For caring for others – $200 per day

Credit for Family Leave
Under this credit, you may claim up to 50 days if the individual was unable to perform services as a self-employed individual because of certain COVID-19 related care they provided to a son or daughter under the age of 18 whose school or place of care is closed for reasons related to COVID-19.

The credit amount for Family Leave is $200 per day.

These two credits are calculated on new Form 7202 (Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals). Any calculated credit is transferred to Form 1040, Schedule 3 line 12b.

See the following for more details:

Mark Castro, CPA

Mark Castro, CPA

Mark has been with CrossLink Professional Tax Solutions (CPTS) since 2008, but has been in the tax industry since 1990. As the government/tax industry liaison for CPTS, Mark has been very active in working with the IRS, States, and other tax industry members to help improve communications, promote standardization, and simplification of eFile systems. Mark has also been active with industry associations as a board member of the National Association of Computerized Processors (NACTP) and the Council of Electronic Revenue Communication Advancement (CERCA) for many years. These two associations work with the IRS and States to help solve key eFile and electronic tax system issues and work to improve the operations of the State and IRS eFile systems.
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Recent Tax Updates