Tax Tip: New Tax Credits
Are you self-employed and either you or your family were infected with COVID-19 or had to quarantine because of COVID-19? You don’t want to miss out on this credit.
The Families First Coronavirus Response Act (FFCRA) included credits to help smaller businesses offer paid sick and family leave wages to employees who were affected by COVID-19. These credits have been all over the news for employers with employees. But the media has been silent about credits for self-employed taxpayers who were affected by COVID-19.
Your time is now! Self-employed individuals can claim these credits on your 2020 tax return. This includes sole proprietors and partners in partnerships.
This act provided two different credits each with their own set of rules, but let me just give you the gist.
The Sick Leave Credit is for individuals who were unable to work because they were experiencing symptoms of COVID-19 and seeking medical diagnosis, subject to self-quarantine by a government agency, or advised by a healthcare provider to self-quarantine. This credit is a max of $511 per day up to $5,110. The Sick Leave provisions also includes a credit if you were caring for someone who was subject to quarantine ordered by a government agency or health care provider, or if you were caring for a child whose school or place of care was unavailable because of COVID-19. This credit is a max of $200 per day up to $2,000.
The Family Leave Credit is an additional credit for individuals who were unable to work because they were caring for a child whose school or place of care was unavailable because of COVID-19. This credit is a max of $200 per day with a max credit of $10,000.
As you can see, there is a lot of assistance out there for those self-employed individuals impacted by this virus. Consult with your tax professional at Ketel Thorstenson to discuss your eligibility about this or other tax matters because each situation is different. Don’t navigate the difficult and ever changing tax codes and legislation on your own. Ketel Thorstenson CPAs and tax professionals receive advanced training and continuing education all year long to keep our service on the forefront of the tax industry. Call us today for guidance on tax planning, tax return preparation, and tax legislation affects or questions.