Self Employed Tax Credit For Sole Proprietors | 1099 | Gig Workers | SETC

The Benefits of Self-Employment Tax Credit Empowers Entrepreneurs.

Did you understand that self-employed individuals are also entitled to sick leave and paid family leave? Don’t go anywhere as we’ll inform you all about it. Today, we’re here for a quick video to tell you about paid sick leave and family leave for freelance individuals. Independent individuals are getting quite a few opportunities to get some help, which is really refreshing.

 

Not only can you get the PPP loan, but you can also claim paid sick leave and family leave. It’s almost unusual to think of because you are your own boss and nobody’s paying you. So how do you earn paid sick leave and paid family leave? Well, in this video, we’re going to tell you how it works. This is nothing new.

 

It has been around since last year. It appeared in the Families First Coronavirus Relief Act and was available from April 1st, 2020. It used to end on December 31st, 2020, but in the Appropriations Act approved in December, it was extended through March 31st of this year. I’m sure you’ve seen a ton of other videos on this subject. But maybe this is your first stop.

 

There are other videos that discuss the paid sick leave amounts and the limit for both sick leave and family leave. Let me recap quickly by stating that if the employee gets sick with COVID-19, has a positive diagnosis, or experiences symptoms and seeks treatment and test results, they obviously need to stay home. The advice we have heard over and over again is, if you have symptoms, stay home. If you cannot telework while at home, you are eligible to get paid for that time. If the employer has less than 500 employees, they are required to pay sick leave and family leave.

 

So how much is that sick leave if the employee is the one who is sick or experiencing symptoms? There is a maximum amount that the employer has to pay, which is $511 per day for 2 weeks or 80 hours, equivalent to two work weeks. If someone earns $800 a day, they are only eligible for $511 of that. If they earn $200 a day, that’s all they get because the maximum is $511. Each day, for 2 weeks, the maximum amount the employer can get back as a credit on those wages is $5,110.

 

The same rule applies to self-employed individuals. The amounts do not change, but how you calculate and claim them is different. In the case of family leave, where the employee is not the one who is sick but needs to stay home due to school closures or lack of childcare options, they can get up to 10 weeks of leave with a maximum of $200 per day or two-thirds of their regular pay. The total credit for family leave is $10,000 for self-employed individuals. You need to look at your 2019 Schedule C, which is where you report your 1099 income or independent income.

 

Divide your net profit from 2019 by 260 to get your daily rate of pay. Apply the same rules as for employees, depending on whether your daily rate is above or below the maximum amounts. The good news is that for 2020, you can also use your income and loss statement to determine the credit. You can choose the better of the two years, which is to your advantage. However, as a self-employed individual, you need to wait until you file your taxes to claim the credits for the first quarter of 2021.

 

To claim the credit on your personal taxes, use Form 7202 instead of Form 7200 for employers. It is a worksheet that is part of your personal income tax return. The result of Form 7202 transfers to line 20 of your Form 1040. The credit is refundable, meaning it can reduce your tax liability or result in a refund. If the credit is higher than your tax, make sure to keep records such as a letter to yourself stating the dates you were out sick, positive test results, and any other relevant information.

 

If it’s for family leave, include the name of the school that was closed, the names and ages of your children, and any special circumstances. Keep this documentation with a copy of your tax return for at least four years.

For more information and to see if you qualify go to www.GigWorkersSolutions.com
Don’t forget this opportunity to get help you must act fast this ends soon!

 

As found on YouTube

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