close
Share with your friends

New IRS form for self-employed individuals to claim sick and family leave tax credits (COVID-19)

New IRS form for self-employed individuals

The IRS today announced that a new form is available for eligible self-employed individuals to claim sick and family leave tax credits under “Families First Coronavirus Response Act” (Pub. L. No. 116-127).

1000

Related content

The “Families First Act” allows eligible self-employed individuals who, due to COVID-19 are unable to work or telework for reasons relating to their own health or to care for a family member, to claim refundable tax credits to offset their federal income tax. The credits are equal to either their qualified sick leave or family leave equivalent amount, depending on circumstances.

Read Form 7202 [PDF 65 KB], Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals

A related IRS release—IR-2021-31 (February 8, 2021)—explains that eligible self-employed individuals will determine their qualified sick and family leave equivalent tax credits by filing Form 7202. Eligible self-employed individuals can claim the tax credits on their 2020 Form 1040 for leave taken between April 1, 2020, and December 31, 2020, and on their 2021 Form 1040 for leave taken between January 1, 2021, and March 31, 2021.

In order to file Form 7202, eligible self-employed individuals must:

  • Conduct a trade or business that qualifies as self-employment income
  • Be eligible to receive qualified sick or family leave wages under the “Emergency Paid Sick Leave Act” as if the taxpayer was an employee

Taxpayers must maintain appropriate documentation establishing their eligibility for the credits as an eligible self-employed individual.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal