If you’re a gig worker, freelancer, or independent contractor who lost income during the COVID-19 pandemic, there’s still time to claim significant tax relief. The Self-Employed Sick Leave and Family Leave Tax Credits, introduced under the Families First Coronavirus Response Act (FFCRA) and the CARES Act, offer financial support to self-employed individuals affected by the pandemic. However, the deadline to apply for these credits is fast approaching: April 18, 2025.
Understanding the Tax Credits
These tax credits are designed to compensate self-employed individuals who were unable to work due to COVID-19-related reasons between April 1, 2020, and September 30, 2021. Eligible circumstances include:
- Contracting COVID-19
- Quarantine or isolation orders
- Caring for a family member with COVID-19
- Caring for a child due to school or daycare closures
- Experiencing side effects from COVID-19 vaccination
The credits can provide up to $511 per day for qualified sick leave and up to $200 per day (67% of average daily self-employment income) for family leave. The maximum total credit available is $32,220.
Who Is Eligible?
To qualify, you must have been self-employed during the eligible period and have a positive net income reported on IRS Form 1040 Schedule SE for 2019, 2020, or 2021. Eligible individuals include:
- Sole proprietors
- 1099 contractors
- Single-member LLCs
- Freelancers
- Gig workers
It’s important to note that each self-employed individual must file a separate claim, even if filing jointly with a spouse.
How to Apply
Applying for these credits involves amending your 2021 tax return by filing IRS Form 1040X along with Form 7202, which calculates the credit amount. This process can be complex, but services like SETC Pros offer assistance to simplify the application.
SETC Pros provides:
- A secure, online application process
- Assistance in determining eligibility
- Preparation and submission of necessary IRS forms
- No upfront fees; payment is due only after you receive your refund
Advanced Funding Option
For those eligible for refunds over $3,000, SETC Pros offers an Advanced Funding feature. This allows you to receive your refund within 5 to 7 business days after the IRS acknowledges receipt of your amended return. The service charges a 9% advanced funding fee and a 20% processing fee, totaling 29% of your refund. Despite these fees, many find the expedited access to funds beneficial.
Avoiding Scams
Be cautious of fraudulent services that demand upfront payments or guarantee large refunds without proper documentation. The IRS warns against such scams and emphasizes that legitimate services will not require payment before delivering results.
Final Thoughts
With the April 18, 2025, deadline approaching, it’s crucial for eligible self-employed individuals to act promptly. Whether you choose to navigate the process independently or seek assistance from services like SETC Pros, claiming these tax credits can provide substantial financial relief.
For more information or to begin your application, visit the official IRS website or consult with a qualified tax professional.
