Self-Employed Tax Credit

The Family First Coronavirus Response Act (FFCRA) is a United States federal law enacted in March 2020 in response to the COVID-19 pandemic. It aimed to provide emergency paid sick leave, expanded family and medical leave, and enhanced unemployment benefits to individuals affected by the pandemic. The FFCRA required certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. Additionally, it provided tax credits to help employers offset the costs of providing these benefits. The FFCRA had various provisions that applied to different types of employers and employees, with the goal of supporting workers and their families during the public health emergency caused by the coronavirus outbreak

In December 2020, under the CARES Act, self employed individuals were included to receive tax credit for sick and family leave.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a significant piece of legislation enacted by the United States Congress in March 2020 in response to the economic impact of the COVID-19 pandemic. The CARES Act aimed to provide financial relief to individuals, businesses, and healthcare systems affected by the pandemic. Some key provisions of the CARES Act include:

1. 1. Economic Impact Payments: The CARES Act authorized direct payments to individuals and families to help alleviate financial strain caused by the pandemic. These payments, also known as stimulus checks, were sent to eligible taxpayers based on their income and filing status.
2. 2. Small Business Assistance: The CARES Act established the Paycheck Protection Program (PPP) to provide forgivable loans to small businesses to cover payroll costs, rent, mortgage interest, and utilities. It also expanded the Economic Injury Disaster Loan (EIDL) program and provided grants to eligible businesses.
3. 3. Unemployment Benefits: The CARES Act expanded unemployment insurance benefits by providing additional federal funding, extending benefits to self-employed individuals and gig workers, and increasing the duration of benefits.
4. 4. Healthcare Funding: The CARES Act allocated funding to support healthcare providers, hospitals, and medical research efforts in combating the COVID-19 pandemic. It also included provisions to expand access to telehealth services.
5. 5. Education and Housing Assistance: The CARES Act provided funding for K-12 schools, colleges, and universities to support distance learning and address other pandemic-related challenges. It also included measures to provide housing assistance and prevent evictions and foreclosures.

Overall, the CARES Act was intended to provide immediate economic relief and support to individuals, businesses, and communities affected by the unprecedented challenges posed by the COVID-19 pandemic.

The self-employed tax credit was created under the Family First Coronavirus Response Act (FFCRA) and extended by the American Rescue Plan Act (ARP). It is a financial aid program for self-employed individuals, freelancers, and independent contractors. This credit aims to compensate those who experienced a loss of income due to COVID-19 related reasons.

The SETC is a specialized tax credit designed to provide support to self-employed individuals during the COVID-19 pandemic.

It acknowledges the unique challenges faced by those who work for themselves, especially during times of illness, caregiving responsibilities, quarantine, and related circumstances. This credit can be a valuable resource for eligible individuals to help bridge financial gaps caused by unforeseen disruptions.

Self-Employed workers who filed schedule C income during the years of 2020 and 2021, and faced challenges of being unable to work during the COVID-19 pandemic, especially during times of illness, caregiving responsibilities, quarantine, and related circumstances.

• Sole Proprietors
• 1099 Contractors
• Freelancers
• Single-member LLC's
• Gig Workers
• Other Self-Employed Workers

The credit is calculated based on your net self-employment income, taking into account the number of days you couldn't work due to COVID related reasons. Here's a breakdown:

Personally Sick: If you were unable to work because you were sick with COVID or quarantined, the credit equals your average daily net self-employment income, up to $511 per day, for a maximum of 10 days.

Caring for a Child: If you were caring for a family member with COVID-or a child whose school or daycare was closed due to COVID, the credit is two-thirds of your average daily net self-employment income, up to $200 per day. For 2020, this is applicable for up to 50 days, and for 2021, up to 60 days.

Your average daily net self-employment income is calculated by dividing your annual net self-employment income by 260 (the average number of workdays in a year). The total credit you can receive is the aggregate of these calculations for the days you were eligible, subject to the daily and total day limits specified by the program.

We make the process simple and easy. First, get started by beginning our easy and quick nline application. Next, you provide some information so that we can calculate an estimate of your credit. Lastly, you will complete the process by signing the necessary documents that we need to submit to the IRS, and we handle the rest!