Self-Employed and Miss Work Due to COVID-19? Here’s What You Can Do

It’s no secret that the COVID-19 pandemic has taken its toll on Americans in a variety of ways. From still elevated unemployment numbers and tens of millions of Americans struggling to make ends meet to restaurants operating at reduced capacity, the impact has been far-reaching. And while the federal government has passed multiple stimulus packages and dispersed checks since the pandemic began, it’s safe to say that many Americans have been a bit surprised that there hasn’t been a ton of flexibility when it comes COVID-related tax benefits.

For instance, while many took advantage of enhanced unemployment benefits, Uncle Sam still needs taxes paid against said benefits. And there haven’t been any special deductions for virtual school-related expenses incurred by families.

However, there is one COVID era tax benefit that you should know about, though you do have to meet certain conditions to qualify. Specifically, if you meet certain “missed work” criteria and are self-employed, you’re likely eligible for tax credits to cover the loss of income during this time. The benefit, known as the COVID-19 Sick and Family Leave Tax Credits, can be attained by filling out Form 7202. Here’s a closer look at the credits and who is eligible for them:

The COVID-19 Sick and Family Leave Tax Credits are specifically for self-employed Americans who were either unable to work due to their own COVID-19 diagnosis, were quarantined due to possible exposure to the virus or had to care for a family member due to a COVID-related disruption. The tax credits are designed to offset the sick leave or family leave equivalent that a self-employed professional would normally receive from their employer.

So, for instance, if you’re a parent who has some sort of side hustle and was forced to take time off to help your children with virtual learning when schools shut down, you’d be eligible to receive the credit. If you had to step away from your home business to care for an elderly relative who was sick, you’d qualify. And if you had to quarantine or step away from your business due to COVID-19 issues that you yourself experienced, then you would qualify as well.

It’s a nice little hidden benefit designed to help out self-employed professionals and gig workers who would likely otherwise have had to eat the costs of taking time away from their jobs. But at the same time, it’s important to know that it’s there for you to take.

It’s estimated that tens of millions of Americans overlook or miss tax deductions or credits that they’re eligible for every year, so be sure to speak with your accountant or know which breaks apply to you. The COVID-19 Sick and Family Leave Tax Credits, for instance, can be received by filling out Form 7202. Just make sure you hang on to any documentation that verifies your eligibility.


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