Due to a lack of awareness and the program’s complexity, we believe millions of self-employed entrepreneurs, sole proprietors, freelancers, and independent contractors missed out on filing for these valuable tax credits in 2020 and 2021. As a CPA firm we have used our experience to recoup COVID-relief funds for thousands of small businesses and individuals.
If eligible, you can receive up to a max of $32,220 in tax credits. Click here to check your eligibility.
What Is The FFCRA Tax Credit —Families First Coronavirus Response Act?
In March 2020, the Families First Coronavirus Response Act (FFCRA) was signed into law to help companies offer paid sick leave and unemployment benefits caused by COVID-19. Initially the FFCRA focused on employers with W-2 employees to help them weather the economic impact caused by the pandemic.
In December 2020 Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act which expanded the FFCRA to cover not only employers, but the self-employed. Thanks to the FFCRA expansion self-employed individuals, freelancers, independent contractors, and gig workers are now eligible for tax credits that pay you back for the time you would’ve normally spent earning money that was lost because of COVID.
Unlike the Paycheck Protection Program (PPP), the FFCRA is not a loan but a retroactive tax credit of your 2020 or 2021 income taxes and will either reduce the current amount you owe the IRS or be sent directly to you in the form of a check or ACH deposit, depending on your tax status. Any FFCRA credits sent directly to you can be spent however you choose and never need to be paid back. Click here to check your eligibility.
How much can I get back?
If eligible, you can receive up to a max of $32,220 in tax credits. Here’s how FFCRA breaks down:
Emergency Paid Sick Leave compensates you with up to $10,220 in tax credits for:
Emergency Paid Family Leave compensates you with up to $22,000 in tax credits for:
Most clients we are filing for are receiving between
$2,000 to $8,000 depending on their tax situation.
Who qualifies for the FFCRA Tax Credit?
To qualify for the FFCRA, you must meet three factors:
- Identify as a Self-employed individual. A few examples, but not limited to, include:
- Sole proprietors
- Independent contractors (1099 workers) Rideshare, food, or product delivery drivers
- Gig workers
- Earning an income via e-commerce sites like eBay, Etsy, Amazon, etc.
- Running a freelance business where you provide services to another company but are not directly employed by them
2. Have filed a Schedule SE of IRS Tax form 1040 in 2020 and/or 2021 with a positive net income and paid self-employment tax on your earnings.
3. Have missed work due to Covid-related issues
Who qualifies for the FFCRA Tax Credit?
The FFCRA allows for a 1099 contractor or self-employed individual to qualify for paid sick time if they were unable to work or telework because of COVID-19. A few qualifying reasons include, but are not limited to:
Note: reasons with * only apply if you’re seeking credit for dates between April 1, 2021 – September 30, 2021.
How do I apply for the FFCRA credit?
Step 1: Visit Nagel & Associates. (You’re already here, good job!)
Step 2: Confirm your eligibility. Use our pre-qualification survey to see if you qualify and to calculate your estimated tax credit.
Step 3: Get your 1040 income tax returns together or sign IRS Power of Attorney so we can pull your IRS transcripts and start the application. We’ll need a few details from you about the dates you’re applying for and the income earned in 2020 and 2021.
Step 4: Sign a few docs, upload your ID info, and select your payment options.
Step 5: Nagel & Associates will e-file for your credit directly to the IRS. Our streamlined process does the heavy lifting for you so just sit back and relax! Normal processing time is 8-16 weeks.
How will I receive my COVID-19 FFCRA credit?
The IRS will deduct your credit from any outstanding tax liabilities you owe. If you don’t owe the IRS anything, the way you’ll receive your tax credits depends on your qualifying dates:
For 2020 Credits
the IRS will issue you a check, sent directly to your mailing address
For 2021 Credits
you can receive either a check or direct deposit to a checking or saving acount
Due to a lack of awareness and the program’s complexity, we believe millions of self-employed entrepreneurs, sole proprietors, freelancers, and independent contractors missed out on filing for these valuable tax credits in 2020 and 2021. As a CPA firm we used our experience to recoup COVID-relief funds for thousands of small businesses and individuals.