Question 1

What is the FFCRA Tax credit program?

Accepted Answer

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.

The FFCRA is federal legislation passed in response to the COVID-19 pandemic. It provides paid sick leave, free COVID-19 testing, food assistance, unemployment benefits, and stipulates employer-provided health insurance protection. For self-employed individuals, it offers equivalent coverage via tax credits that can be claimed on your income tax return, effectively reimbursing you for periods of sick leave due to COVID-19.

Question 2

How much is the FFCRA Tax credit?

Accepted Answer

The total FFCRA Tax credit can be up to $32,200 and is based on your self-employed net earnings in 2020 and 2021.
To calculate your FFCRA credit, we use your daily average of self-employment income (this is your net earnings for the taxable year divided by 260) and the amount of self-employment work missed due to COVID-19 related issues. This allows the IRS to estimate how much you lost in wages for every day you were not able to work.

Question 3

How is the Tax Credit determined?

Accepted Answer

It can take up to three weeks for the IRS to acknowledge the acceptance of your FFCRA credit application and up to 20 weeks from that acceptance to receive your refund via check or direct deposit.

Question 4

How long does it take to get the tax refund?

Accepted Answer

It can take up to three weeks for the IRS to acknowledge the acceptance of your FFCRA credit application and up to 20 weeks from that acceptance to receive your refund via check or direct deposit

Question 5

Is the FFCRA a Loan or Grant?

Accepted Answer

FFCRA is a tax credit not a loan. It is also not considered a grant as it’s a refund of taxes you’ve already paid. The tax credits are designed to cover the same types of expenses that mandatory paid leave would cover for employees. If you’re sick or caring for someone due to COVID-19, or you’re experiencing conditions that prevent you from working, these credits aim to compensate you for the income you have lost.

Question 6

Who qualifies for the FFCRA Tax Credit?

Accepted Answer

To qualify for the FFCRA, you must meet the following criteria

Indentify as a Self-employed individual. A few examples, but not limited to
include: sole proprietors, independent business owners, 1099 contractors,
freelancers, gig workers, single-member LLCs.

Have filed a Schedule SE of IRS Tax form 1040 in 2020 and/or 20201 with
positive net income and paid self-employment tax on your earnings

Have missed work due to COVID-19-related issues

Question 7

What dates are eligible for the FFCRA Tax Credit?

Accepted Answer

The FFCRA covers the days you were unable to perform self-employment work from April 1, 2020 to September 30, 2021.

Here is a breakdown of the number of days you could be eligible
‍
Childcare-related time off – up to 110 days

• 50 days between April 1, 2020 and March 31, 2021
• 60 days between April 1, 2021 and September 30, 2021

Yourself or loved one – up to 20 days

• 10 days between April 1,2020 and March 31, 2021
• 10 days between April 1, 2021 and September 30, 2021

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