Self Employed – Paid Leave Acts

Paid Sick Leave

A self-employed individual is eligible for the credit if he or she would be entitled to receive paid sick leave under the EPSLA if the individual were an employee of an employer (other than himself or herself)

For eligible self-employed individuals who —

  1. Are subject to a federal, state, or local quarantine order related to COVID-19,
  2. Have been advised by a health care provider to self-quarantine due to concerns related to COVID-19, or
  3. Experience symptoms of COVID-19 and seek diagnosis

The qualified sick leave equivalent is capped at the lesser of $511 per day or 67% of the average daily self-employment income for the taxable year per day

An eligible self-employed individual is eligible for a paid sick leave credit if he or she:

  1. Is caring for a family member who is suffering from the coronavirus, or
  2. Is caring for a child whose school or place of care has been closed due to the coronavirus, or
  3. The individual himself or herself is experiencing any symptoms that are substantially similar to the symptoms of the coronavirus

The qualified sick leave amount is capped at the lesser of $200 per day 67% of the average daily self-employment income for the taxable year per day.  Individuals are limited to those days in which the individual is unable to work for reasons that would entitle him or her to leave under the EPSLA.

Family and Medical Leave

Eligible self-employed individuals are those who would be entitled to receive paid family leave under the EFMLEA if the individual were an employee of an employer (other than himself or herself).  The equivalent amount is capped at the lesser of $200 per day or 67% of the average daily self-employment income for the taxable year per day, including only those days that the individual would be entitled to receive paid leave under the EFMLEA

Tax credits for self employed

The Families First Coronavirus Response Act allows for self employed individuals to claim refundable tax credits equal to 100% of eligible qualified sick leave and family and medical leave.  Presumably, the tax credits will be claimed on the 2020 Form 1040, unless the IRS announces accelerated procedures to claim the credits.  Substantiation will likely be required although there is no guidance yet regarding what will be needed.  Taxpayers may be able to reduce their quarterly estimated tax payments by the amount of their eligible credit in order to effectively receive the benefit.  As more guidance is released, we will keep you informed.