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Form 7202 - Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals

The Families First Coronavirus Response Act (FFCRA) was promulgated on 18 March, 2020. Per this Act, refundable tax credits calculated against the employment can offset the expenses incurred while providing leave to employees who cannot work or telework due to coronavirus. Further, the Act provides refundable credits to self-employed persons who can evaluate claimable amounts for family leave and qualified sick equivalent credits through Form 7202.

 The equivalent credits are available for people who are unable to work or had to look after their families due to the pandemic. They are calculated similarly to qualified sick and qualified leave wages per the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act respectively.

Factors Considered In Calculations

  • The maximum sick leave is ten days. In cases where an individual misses work to take care of the family and for personal needs, the latter takes priority during calculations.
  •   The days missed must fall between April 1 and December 31, 2020 for the credits to accrue.
  • The total self-employment earnings/260 days are equivalent to the daily self-employment earnings.
  •   A total of $5,110 and $511 daily sick leave credit.
  •  Two-thirds of the paid sick leave credits amount to the family leave credit.
  •   A maximum of $200 family leave credit daily and $2,000 in the total.
  •   50 days maximum for family leave credit of $200 daily or a total of $10,000.
  •  Family leave or qualified sick leave from an employer reduces the credit.

Form 7202 has two sections; the total of the calculations from each sections is recorded in Form 1040, Section 3 line 12b.

One needs to complete Schedule C, Schedule F and Schedule K-1 (Form 1065), Box 14A before completing Form 7202 in ProWeb or Taxx Savage Pro.

Select Payments, Estimates & EIC then Self-Employed Sick/Family Leave Credit to access Form 7202 in Taxx Savage Pro. However, in ProWeb, start by selecting the Federal section then deductions, credit menu and lastly credit for family leave and sick leave for some self-employed persons.

 

Additional Information: 

IRS: Form 7202 instructions

IRS Notice 2020-54, Guidance on Reporting Qualified Sick Leave Wages and Qualified Family Leave Wages Paid Pursuant to the FFCRA