WASHINGTON – The coronavirus pandemic has wreaked havoc on our economy, leaving hundreds of thousands of Americans without the income they had before March 2020.
Because of this, the Internal Revenue Service has announced a new form that could help self-employed people claim a tax credit under the Families First Coronavirus Response Act (FFCRA).
Form 7202 will allow tax credits on taxpayers’ 2020 filing if they had to take leave between April 1 and Dec. 31, 2020, if they or a family member had COVID-19.
The FFCRA was passed in March 2020 and, according to the IRS, “allows eligible self-employed individuals who, due to COVID-19 are unable to work or telework for reasons relating to their own health or to care for a family member to claim refundable tax credits to offset their federal income tax.”
The credit is equal to their qualified sick leave or family leave equivalent amount.
How can you qualify?
According to the IRS, taxpayers can qualify if they conduct a trade or business that qualifies as self-employment. The taxpayer must also be eligible to receive qualified sick or family leave wages under the Emergency Paid Sick Leave Act or Emergency Family and Medical Leave Expansion Act, as if the person was an employee.
Taxpayers must also provide documentation that allows for the tax credits.
For more information and to download the form, click here.
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