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.
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:
Up to 10 days between April 1, 2020 to March 31, 2021
Up to 10 days between April 1, 2021 to September 30, 2021
How it’s calculated: Your daily earnings or $511 per day, whichever is lower
Emergency Paid Family Leave compensates you with up to $22,000 in tax credits for:
Up to 50 days days between April 1, 2020 to March 31, 2021
Up to 60 days days between April 1, 2021 to September 30, 2021
How it’s calculated: 67% of daily earnings or $200 per day, whichever is lower
To qualify for the FFCRA, you must meet three factors:.
1
Identify as a Self-employed individual. A few examples, but not limited to, include:
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
Sole proprietors
Independent contractors (1099 workers)
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
Unfortunately if you were an employee who received a W2 form in 2020 or 2021, your employer might have already claimed the FFCRA to cover your sick leave, making you ineligible to apply through Madison Tax Group.
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:
Following a federal, state or local quarantine or isolation order;
Advised by a healthcare provider to self-quarantine;
Experienced Coronavirus symptoms and were seeking a medical diagnosis;
Caring for a child or other individual, who was subject to an government-issued or self-quarantine restriction;
Caring for a child whose school or daycare was closed or unavailable.
Obtaining a COVID-19 vaccination*
Recovering from illness related to the COVID-19 vaccine*
Seeking or waiting for the results from a COVID-19 test*
Note: reasons with * only apply if you’re seeking credit for dates between April 1, 2021 - September 30, 2021.
Step 1
Visit Madison Tax Group. (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 previous tax statements together 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. By having Madison Tax Group handle these steps, you’ll save 10+ hours.
Step 4
Sign a few docs, upload your ID info, and select your payment options.
Step 5
Payment. Madison Tax Group charges a 20% processing fee (based on your total refund) along with a $150 non-refundable verification fee that will be deducted from your overall processing fee.
Step 6
Submit your application directly to the IRS via Madison Tax Group. Our streamlined process does the heavy lifting for you so just sit back and relax!
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:
Due to a lack of awareness and the program's complexity, we believe millions of entrepreneurs, sole proprietors, freelancers, and independent contractors missed out on filing for these tax credits in 2020 and 2021. Using our experience in recouping over $600 million in COVID-relief for thousands of small businesses and individuals, we built the market’s first automated tool designed by CPAs and tax attorneys to maximize your FFCRA refunds with speed and ease.
