The Families First Coronavirus Response Act (FFCRA), as amended by the COVID-related Tax Relief Act of 2020, is intended to help the United States combat COVID-19 by providing small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. The FFCRA extends to self-employed individuals equivalent refundable tax credits against net income tax.
These credits are equivalent to the amount of qualified sick leave wages or qualified family leave wages the self-employed individual could receive under the Emergency Paid Sick Leave Act or the Emergency Family and Medical Leave Expansion Act, two separate provisions of the FFCRA, if the individual were an employee of an employer (other than himself or herself).
Eligible self-employed individuals are entitled to claim qualified sick and family leave equivalent credits. To be an eligible self-employed person, both the following must be true:
- You regularly carried on a trade or business within the meaning of section 1402.
- You would have been:
- Eligible to receive qualified sick leave wages under the Emergency Paid Sick Leave Act if you had been an employee of an employer (other than yourself), and/or
- Eligible to receive qualified family leave wages under the Emergency Family and Medical Leave Expansion Act if you had been an employee of an employer (other than yourself).