You’ve got questions, And we’re here to help!
Can you explain what the FFCRA tax credit program is?
To help people affected by COVID-19, the government made a law called the Families First Coronavirus Response Act (FFCRA) in March 2020. This law was originally for companies with employees on payroll, and it gave them paid sick leave and help with unemployment benefits. In December 2020, another law called the Coronavirus Aid, Relief, and Economic Security (CARES) Act expanded the FFCRA to also include self-employed people. Now, self-employed individuals, freelancers, independent contractors, and gig workers can get tax credits to make up for the money they lost because of COVID. This law also provides other things like free COVID testing, food assistance, and help with health insurance. If you're self-employed, you can claim these tax credits on your tax return to get reimbursed for the time you couldn't work because of COVID.
What is the amount of the FFCRA credit?
You may be eligible for a tax credit called FFCRA that helps self-employed people who couldn't work because of COVID-19. The credit amount can be as much as $32,200, and it's based on how much money you made from your own business in 2020 and 2021. To figure out the credit, the IRS looks at how much money you make on average per day from your business and how many days you couldn't work because of COVID-19. This helps them estimate how much money you lost for each day you couldn't work.
Why haven't I come across the FFCRA tax credits until now?
In the beginning, the FFCRA only applied to businesses with W-2 employees. Later on, the CARES act was passed and it expanded to include assistance for self-employed individuals as well, but not many people knew about it. Studies have discovered that more than 80% of self-employed people don't realize they can get tax credits through the FFCRA.
Does this have any similarities with the PPP program?
The PPP (Paycheck Protection Program) and FFCRA (Families First Coronavirus Response Act) are two separate plans that help people cope with the financial effects of the COVID-19 pandemic. PPP gives small businesses loans that they might not have to pay back if they use the money for certain expenses. On the other hand, FFCRA doesn't give money directly but provides a credit on taxes that people have already paid. The goal of PPP is to help businesses, while FFCRA is more about helping individual people.
How do they figure out how much credit you get?
The amount of money you get depends on how much you usually earn from self-employed work and how many days you couldn't work because of COVID-19 issues like quarantine orders or being sick. If you need childcare and had to take time off, you'll get a credit based on how many days you were on leave. It will be either your average daily income or $511, whichever is lower. If you had to take time off for personal COVID-related reasons or to take care of someone else, you'll get a credit based on the number of days you were on leave. It will be either ⅔ of your average daily income or $200, whichever is lower. You can use the American Made Business portal to easily follow these steps and find out how much you can get as a tax credit.
What is the typical amount of money I could get back as a refund?
On average, the American Made Business customers have been refunded approximately $9,400 through the FFCRA.
How can I get my FFCRA refund?
The IRS will mail you a check for the tax credit you earned in 2020 and/or 2021 through the FFCRA. They will send it to the address connected to your American Made Business account. But if you owe any taxes, the refund will be used to pay those first.
How much time will it take to get my money back as a refund?
It may take about three weeks for the IRS to confirm that they have received your FFCRA credit application. After that, it could take around 20 more weeks for you to get your refund, either as a check or directly deposited into your bank account.
What are the deadlines to qualify for the FFCRA tax credits?
You have a deadline to fix your 2020 and/or 2021 tax return if you want to claim or change the FFCRA credits. You can do this within three years after the original due date of your return or within two years after you paid the tax, whichever is later. For your 2020 taxes, the deadline to apply for FFCRA tax credits is April 15, 2024, and for your 2021 taxes, it is April 15, 2025.
Is this a loan or grant?
The FFCRA isn't a loan or a grant. It's actually a tax credit, which means it's money you can get back from the taxes you've already paid. This credit is meant to help you with expenses like taking time off work if you're sick with COVID-19, caring for someone with COVID-19, or dealing with other conditions that keep you from working. It's basically a way to make up for the money you might lose when you can't work.
Will claiming FFCRA tax credits affect how I file my income taxes in 2023?
Filing for the FFCRA tax credit won't affect how you file your taxes for the year 2023. Our team of tax experts will adjust the taxes you've already filed for 2020 and 2021 to apply for the FFCRA tax credits.
How do I get the tax credits for the FFCRA?
If you want to get the FFCRA tax credits, you need to figure out if you're eligible and make changes to your tax returns for 2020 and/or 2021. It's a good idea to hire a Certified Public Accountant (CPA) to help you with this, but that can be expensive and time-consuming. Alternatively, you can simply click the blue button on the top right of your screen, answer some questions, and let American Made Business handle it for you! Our team of CPAs has made a quick and easy tool for self-employed people and sole proprietors like you to claim the federal FFCRA tax credits that you deserve.
Covid Self-Employment Credits Eligibility
Who is eligible to receive the FFCRA tax credits?
To be eligible for the FFCRA, you need to meet these requirements:1. You consider yourself self-employed. This includes people like business owners, contractors, freelancers, and gig workers.2. You filed a Schedule SE with your IRS Tax form 1040 in either 2020 or 2021 and had a net income (profits) on which you paid self-employment tax.3. You have experienced a loss of work because of situations related to COVID-19.
What can be considered as a valid reason for claiming FFCRA benefits?
To be able to get tax credits under FFCRA, it means you can get money back if you couldn't work because of COVID-related problems. You might be able to get these credits if any of the following happened to you:
- A government agency told you to stay at home or kept you separate from others.
- Your doctor said you should stay at home to keep yourself and others safe.
- You had symptoms of COVID-19 and were waiting to see your doctor.
- You were waiting for the results of a test for COVID-19.
- You were getting the COVID-19 vaccine.
- You had side effects from the COVID-19 vaccine.
- You had to take care of your kids because their school or daycare was closed.
- You had to take care of someone else in your family who had COVID-19 issues.
Which dates can you use to get FFCRA tax credits?
The FFCRA can help you if you couldn't work because of childcare issues or if you or a loved one were sick. Here's how many days you could qualify for:
Childcare time off: You could get up to 110 days off.
- 50 days from April 1, 2020, to March 31, 2021.
- 60 days from April 1, 2021, to September 30, 2021.
Time off for yourself or a loved one: You could get up to 20 days off.
- 10 days from April 1, 2020, to March 31, 2021.
- 10 days from April 1, 2021, to September 30, 2021.
What does it mean to work for yourself or to be self-employed?
The IRS considers a self-employed person in the United States to be someone who meets the following criteria:
- You work for yourself as a sole proprietor or independent contractor.
- You are part of a partnership that runs a business.
- You run your own business, even if it's just part-time or gig work.
The American Made Business platform is designed to help people who are self-employed, such as sole proprietors, independent contractors, freelancers, gig workers, and single member LLCs. We also assist individuals from a wide range of industries, including realtors, estheticians, hairstylists, taxi drivers, financial consultants, graphic designers, event staff, and construction workers.
Am I eligible for FFCRA tax credit if I've already been receiving unemployment benefits?
Even if you got unemployment benefits, you can still get the FFCRA tax credit. Just remember, you can't count the days you were on unemployment as days when COVID-19 stopped you from working.
If I work as a W2 employee, am I eligible to receive FFCRA tax credits?
If you made money from working for yourself and also had a regular job in 2020 and/or 2021, you might still be able to get money back on your taxes through FFCRA. But if your employer already filed for FFCRA credits on your behalf, you might not be able to use the American Made Business platform.
If you get paid time off from your regular job, it might affect how much money you can get back on your taxes for your self-employment work under FFCRA. You can't get double benefits for the same time period. However, if your regular job doesn't give you enough coverage, you might be able to get extra money back based on your self-employment income.
Am I eligible for the FFCRA tax credit if I have already taken Sick and Family Leave?
If you have already received Sick & Family Leave credits for 2020 or 2021, you can still check if you are eligible to get more FFCRA tax credits through the American Made Business portal.
About American Made Business
What exactly is American Made Business?
American Made Business is a team of seasoned business professionals, with varied and exceptionally skilled backgrounds. They've created a special program made for everyone, but specifically focused on the self-employed, independent contractors, gig workers, sole proprietors, and anyone doing their side hustle or business to pursue the American Dream! Basically, our main objective is to help people who work for themselves (like freelancers and gig workers) to get the tax credits they should have from the FFCRA. We handle every page of the paperwork and send it to the IRS for you, so you can spend more time growing your business and getting closer to living the dream... instead of just dreaming.
Can I count weekends as part of the days I can include?
Certainly! If you have a job where you work for yourself and you couldn't do some work on a weekend that you would normally do, then you are allowed to consider weekends as days that you missed for work.
Can I count the days when I looked after someone else's child besides my own?
Yes, you could be eligible to look after a child who is not your own by meeting the requirements in the "Caring for others" area of our website.
What would happen if my kid's school switched to online classes? Can we still say that the school is "closed" when it comes to getting credit?
Yes, if the place where your child goes for school or care is closed, then it's considered "closed" for paid sick leave and family and medical leave, even if your child still has assignments to do.
Why is it necessary to have positive net self-employment income in order to be eligible for the FFCRA income tax credit?
To receive the FFCRA income tax credit from the IRS, you need to have made more money than you spent. This shows that you had income that can be taxed, and the credit can be applied to it. We know that the Covid-19 pandemic affected people all around the world. If you didn't make more money than you spent in 2020 because of Covid-19 restrictions, we can use your income from the previous year, 2019.
Should I give you my tax returns for the years 2019, 2020, and 2021?
You don't need to send in your tax returns from 2020 and 2021 to American Made Business. Our system is automated and makes it super easy to get your FFCRA tax refund. We handle everything, like updating your tax returns and sending your application to the IRS.
What is the cost for American Made Business processing and how can I make the payment?
At the time of writing, the upfront American Made Business processing fee can be paid in two ways:
a. Two payments of $497 (total $994), split over 30 days.
b. A single upfront payment of $797 (saving $197)
This can be easily paid via Square, Cash App, Venmo, or Credit or Debit Card at the time of filing.
Both payment options will include a standard twenty percent (20%) Success Fee, based on the refund amount you will receive. This fee covers the considerable expenses associated with retrieving your official tax records, the work of our Tax Experts and CPAs in calculating and filing your paperwork, and all of the time, energy, and knowledge it takes to ensure compliance with all of the relevant tax laws. Our 20% Success Fee is deducted from the same bank account your Refund Credit from the IRS is deposited to, via ACH draft.
Tax Questions & Terminology
What does it mean to be a "son or daughter" for these credits?
The IRS says a "son or daughter" is anyone for you whom you stand in the role of a parent, for whom you provide the same care one would normally expect from a parent. This means anyone who you have a day-to-day responsibility to care for, even if you have no financial, legal, or biological relationship to them. They further clarified that they don't have to be living with you or even be under 18, as long as they are disabled or sick and required your care.
Further reading:
Instructions for Form 7202: https://www.irs.gov/instructions/i7202#en_US_2021_publink100062870
FFCRA common questions, #40: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions#40
Fact Sheet #28B: Using FMLA Leave When You are in the Role of a Parent to a Child: https://www.dol.gov/agencies/whd/fact-sheets/28B-fmla-in-loco-parentis
Administrator’s Interpretation No. 2010-3: https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/FMLAAI2010_3.pdf
What exactly is a Form 1040?
The IRS Form 1040 is like a report card for adults to show how much money they made in a year and figure out how much taxes they owe. If you want to get tax credits from the FFCRA, American Made Business will fix up your already filled-out Form 1040.
What does the Form 1040X refer to?
The IRS Form 1040X is the official document you need to change or fix any mistakes on your personal tax return that you already filed. In order to get the FFCRA tax credits, American Made Business will make these changes for you by filling out a special form called 1040-X.
What does the Schedule SE Form 1040 mean?
Schedule SE is a form that self-employed people use to figure out how much tax they owe for Social Security and Medicare. It's important to fill out this form correctly if you work for yourself.
American Made Business can help self-employed individuals with FFCRA tax credits. But keep in mind, to be eligible, you must have self-employment income listed on line 6 of the Schedule SE form.
What does Schedule C mean?
Schedule C is a special form that people who work for themselves use to report how much money they made and spent in their business. It is like a report card for their business finances. When they file their personal taxes, they include this form to figure out if they made a profit or loss in their business. This information is used to calculate their total taxable income. Even though you don't see Schedule C when you file your taxes, it still has an important role in figuring out how much money you made from being self-employed.
What does Form 7202 mean?
IRS Form 7202 is a special tax form that self-employed people can use to get money from the Families First Coronavirus Response Act (FFCRA). This form helps you figure out how much money you can get from the FFCRA if you have reasons related to COVID-19.
What does Form 8821 mean?
IRS Form 8821 is a special form that gives permission for your tax information to be shared with someone else, like a tax professional. It lets them access your taxes for a certain period of time. American Made Business, a tax service, can use this form to get the tax information they need to calculate your FFCRA credit and make any changes to your tax returns. It's important to know that this form doesn't give American Made Business permission to represent you before the IRS, it just lets them see your confidential tax information. If you need someone to represent you before the IRS, you would have to fill out a different form called Form 2848.
What occurs when couples get divorced after filing their taxes in 2020/2021?
If you and your spouse filed your 2020 or 2021 taxes together, the IRS and American Made Business need both of your signatures on any changes you make to your tax return. They also want both of you to confirm your identities. But if you were married and filed separately or as the head of your household, neither the IRS nor American Made Business need any information or signatures from your spouse.
What occurs if I owe taxes?
If you owe taxes, the IRS will use your FFCRA credit to lower the amount you owe. If there is any FFCRA credit left over, you will receive it as a check in the mail.