Self Employed Sick Leave Credit And Unemployment

Families First Coronavirus Response Act: Questions And Answers

FFCRA Leave Requirements Expired Dec. 31, 2020

The requirement that employers provide paid sick leave and expanded family and medical leave under the Families First Coronavirus Response Act expired on Dec. 31, 2020. Please visit the Wage and Hour Divisions FFCRA Questions and Answers page to learn more about workers and employers rights and responsibilities after this date.

As provided under the legislation, the U.S. Department of Labor will be issuing implementing regulations. Additionally, as warranted, the Department will continue to provide compliance assistance to employers and employees on their responsibilities and rights under the FFCRA.

New Targeted Eidl Advances

You might qualify for the new Targeted EIDL Advance of up to $10,000 if:

• Your business is located in a low-income community , and
• You suffered a 30 percent reduction in revenue during an eight-week period beginning March 2, 2020, or later.

Unlike EIDLs themselves, Targeted EIDL Advances need not be paid back. They really are tax-free government grants.

Unfortunately, these advances will rst be made available only to those businesses that:

• Received a previous EIDL Advance for less than $10,000, or
• Applied for an advance before December 27, 2020, but didnt receive one because the funding was exhausted at that time.

The SBA will send you an email invite if youre in either category. And if monies are left after the invites, the SBA may accept new applications.

You apply for the Targeted EIDL Advances online at the SBA website.

Information On An Application For Employment

What kind of information should be provided in an application for employment? While certain questions are legal, others might not. The intent of this form is to assess a persons suitability for the position. You may want to ask the applicant about their previous job history. You might ask about the details of their contact numbers and the names of previous employers. You can ask for their employment history and education background when youre looking to hire a new employee.

When you ask about an applicants marital status are legal, it is not a good idea to ask if he or she is pregnant. Similar to questions about a persons consumption of alcohol or other substances. Although these questions might seem legal, they could violate federal laws. If you are considering adding these questions on an employment application You should consult with legal counsel to review the form. Never ask regarding race or ethnicity. Dont ask applicants about their age or gender.

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Lost Wage Assistance Program

What was the Lost Wages Assistance Program ?

On August 8, 2020, the President issued an executive memorandum authorizing the Federal Emergency Management Agency to expend up to $44 billion from its Disaster Relief Fund to provide supplemental benefits to Americans receiving unemployment benefits, creating the Lost Wages Assistance Program . The program provided eligible claimants with an additional $300 in benefits for each of the qualifying weeks. LWAP was only available for the weeks ending August 1, 2020 through September 5, 2020.

Who was eligible for the additional Lost Wages Assistance ?

The program was limited in scope and, due to federal restrictions, was available only to those persons who provided self-certification that they are unemployed, partially unemployed, or unable or unavailable to work due to disruptions caused by COVID-19 and who received at least $100 from a qualifying underlying unemployment benefit program.

An individual was determined to have received at least $100 per week for purposes of being an eligible claimant if the individuals weekly benefit amount as provided on the monetary determination is at least $100 . In addition, the week in question must have been considered compensable.

When did the additional Lost Wages Assistance start, and how long did it last?

Are the LWA benefits taxable?

Yes. These benefits are subject to state and federal taxes.

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How Is The Qualified Family Leave Equivalent Amount For An Eligible Self

During the second and third quarters of 2021 , the qualified family leave equivalent amount with respect to an eligible self-employed individual is an amount equal to the number of days that the self-employed individual cannot perform services for which that individual would be entitled to paid family leave ), multiplied by the lesser of two amounts: $200, or 67 percent of the average daily self-employment income of the individual for the taxable year, or the prior taxable year.

Tips For Handling Joblessness

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Why Sign Up For Paid Leave

As a self-employed Washingtonian, youre not required to participate in Paid Family and Medical Leave. But if you elect coverage, youll have access to up to 12 weeks of paid time off a year to care for yourself or a family memberor 16 weeks for combined medical and family leave after giving birth, or 18 weeks if you experience pregnancy- or birth-related complications.

You can receive Paid Leave after you or a family member experience a qualifying event such as a major surgery, serious illness or injury, a new baby or child joining your family, or a family members military deployment.

To opt-in to receive Paid Leave coverage, youll need to:

• Create an elective coverage account, and
• Complete the opt-in process.

After you opt-in, your elective coverage becomes effective at the start of the following quarter:

• Once that first quarter of coverage is complete, you will be able to file wage reports and pay premiums.
• We will calculate your hours worked.

After you have completed your first quarter of coverage, youll be eligible to receive benefits if you:

• Worked 820 hours or more after your elective coverage became effective,
• Have 820 hours or more in your qualifying period, and
• Have a qualifying event.

Once you opt in, you need to report your wages/earnings every quarter. Visit paidleave.wa.gov/reporting/ for additional reporting information.

Taking The Credits In Advance

To take the credit in advance of ling your tax return, you can reduce your quarterly estimated tax payments by the anticipated amount of the credit. From April 1, 2020, through March 30, 2021, you could have deducted the credit from both the income tax and self-employment tax portions of your estimated taxes. For April 1, 2021, and later, you can deduct the credit only from the income tax portion of your estimated tax payments.

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Average Daily Net Earnings From Self

You determine your average daily net earnings from self-employment by dividing your total net self-employment income for the year or the prior year by 260. Your net self-employment income is on Schedule SE, line 6.

Example: Jane is a self-employed consultant whose net earnings from self-employment income for 2021 are $200,000. Her average daily net earnings from self-employment income are $769 , but her sick leave credit is capped at $511. She takes four days off during May 2021 to recover from the side effects of her second COVID-19 vaccination. She may claim a sick leave credit of 4 x $511 = $2,044.

Paid Leave Credit For Vaccines

This credit allows qualified employers who employ fewer than 500 employees to be reimbursed for the cost of providing sick and family leave to employees due to COVID-19, including employees taking time off to receive or recover from COVID-19 vaccines. Employers can receive up to $511 per day for each vaccinated employee. See IRS Covid-19 Employee Paid Leave for more details.

Type: RefundableClaim Process: File Form 941, Employer’s Quarterly Federal Tax Return to claim this credit.

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Employment Application Form That Is Free To Print Template

Employers frequently utilize an employment application to screen applicants. Employers utilize it to collect specific information regarding applicants skills, qualifications or experience, as well as other relevant details. An employment application typically asks about past employment, education, references, as well as other pertinent details. Questions on current or past job opportunities will also be asked. Many states also have laws that govern what is included on the forms. Here are some examples of employment application forms. They are available online or download them onto your computer.

Two-page employment application which can be printed out and is absolutely free. It collects basic information from potential employees. It includes information such as name address, email address, address, phone number, and a telephone number. The template includes information for educational information, relevant diplomas and professional experience. This template will allow you to quickly evaluate the qualifications of each candidate. It will be easier for applicants to fill out the form correctly If you have templates.

Economic Injury Disaster Loans

Under the CARES Act, small business owners, sole proprietorships, independent contractors, and other self-employed individuals were eligible to apply for Economic Injury Disaster Loans , which seeks to alleviate loss of revenue due to COVID-19.

Under the CARES Act, eligible individuals were able to apply for an EIDL cash advance of up to $10,000. The EIDL loan amount was based on the amount of economic injury the individual sustained as a result of the coronavirus epidemic and will not have to be repaid.

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Filing An Initial Claim

What information do I need to file a new application?

When filing a new application, you will need the following information:

• Your Social Security number
• Full mailing address, including apartment or lot number, Zip Code and PO Box if you use one
• A phone number where you can be reached during the day
• The name and mailing address of your last employer, no matter how long you worked there
• Note: Your paycheck stub or W-2 form usually contains this information
• The date you began and stopped working for each employer and the reason you left each job for the last 18 months
• The county in which you live
• Your driver’s license number
• If you are not a citizen or national of the United States, your employment authorization number and expiration date
• If you were active duty military within the past 18 months, your DD-214, Member #4 form
• If you were a federal employee, your Standard Form SF-50 or pay stub
• Any separation, vacation, or holiday pay you have received or will receive in the future.

A record of your application will not be established unless you are told your claim has been accepted. If you are unable to complete your application, the information you have entered will be saved for 7 days from the date you began filing the claim so that you can complete it later and within 7 days.

What if I have wages earned in another state, the military, or the federal government?

Go to GetKansasBenefits.gov and click to file an online application for unemployment insurance if:

Independent Contractors Can Now Collect Unemployment Benefits

Ordinarily, independent contractors can’t collect unemployment from their state unemployment insurance agency when they are out of work. This is because they are not employees and ordinarily do not pay unemployment taxes .

However, the Pandemic Unemployment Assistance program passed by Congress in mid-2020 made independent contractors and gig workers eligible for unemployment for the first time starting March 2020, and increased the minimum benefit by $600 per week. PUA benefits were scheduled to expire March 14, 2021, but have now been extended through September 6, 2021 by the American Rescue Plan Act . Independent contractors can collect up to 79 weeks of benefits . ARPA also increases the maximum unemployment benefit by $300 per week through September 6, 2021.

You need to apply for unemployment benefits through your state unemployment office. Each state has its own eligibility requirements, benefit amounts, and application procedures. You can find a link to your state unemployment office at the Unemployment Benefits Finder.

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How Is The Average Daily Self

Average daily self-employment income is an amount equal to the net earnings from self-employment for the taxable year, or prior taxable year, divided by 260. A taxpayer’s net earnings from self-employment are based on the gross income that the individual derives from the taxpayer’s trade or business minus ordinary and necessary trade or business expenses.

Social Security Tax Deferral

If you have employees, you can defer the 6.2% employer portion of Social Security tax for March 27, 2020 through December 31, 2020. Self-employed taxpayers can also postpone the payment of 50% of the Social Security portion of their self-employment tax for the same period.

This is a deferral rather than forgiveness, so those amounts will eventually need to be repaid. Half of the deferred amount is due on December 31, 2021, and the other half is due on December 31, 2022.

If you’re not sure whether these credits apply to you, our Tax Credit Calculator, available in our Self-Employed Coronavirus Relief Center, will walk you through determining which self-employed tax credits you can take and estimate your potential benefits.

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Social Security Taxes You Pay

Instead of having payroll taxes taken out of their paychecks like regular employees, you must pay a special 15.3% tax if you’re self-employed. The overall tax actually consists of two parts a 12.4% Social Security tax and a 2.9% Medicare tax. The good news is that you get to write off half of the self-employment tax you pay. Plus, you don’t have to itemize to take advantage of this deduction .

There are some limits on the tax that help, too. You only have to pay the 15.3% tax if you have net earnings of $400 or more from self-employment during the year. Also, for 2022, the maximum amount of self-employment income that’s subject to the 12.4% Social Security tax is $147,000. There’s no Social Security tax due on income above that amount.

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What Is Pandemic Unemployment Assistance ?

Pandemic Unemployment Assistance is a program that temporarily expands unemployment insurance eligibility to self-employed workers, freelancers, independent contractors, and part-time workers impacted by the coronavirus pandemic.

PUA is one of the programs established by the Coronavirus Aid, Relief, and Economic Security Act, a $2 trillion coronavirus emergency stimulus package that President Donald Trump signed into law on March 27, 2020. The Act expands states’ ability to provide unemployment insurance to many workers affected by COVID-19, including people who aren’t ordinarily eligible for unemployment benefits.

KEY TAKEAWAYS

• Established by the CARES Act, the Pandemic Unemployment Assistance temporarily expands unemployment insurance eligibility to self-employed workers, freelancers, independent contractors, and part-time workers.
• You must provide self-certification that you are able to work and available for work, and that you are unemployed, partially employed, or unable or unavailable to work due to a COVID-19-related situation.
• Benefit amounts are calculated based on previous earnings, using a formula from the Disaster Unemployment Assistance program under the Stafford Act.
• Under the Federal Pandemic Unemployment Compensation program, those who were eligible for PUA also received $600 per week through July 31, 2020.
• Workers are eligible for retroactive benefits and can receive benefits for up to 50 weeks.

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Who Is An Eligible Self

An eligible self-employed individual is defined as an individual who regularly carries on any trade or business within the meaning of section 1402 of the Code, and would be eligible to receive qualified sick leave wages or qualified family leave wages that would have satisfied the requirements of the EPSLA or Expanded FMLA, as amended for purposes of the ARP, if the individual were an employee of an Eligible Employer that would have been subject to the requirements of the EPSLA or Expanded FMLA, as amended for purposes of the ARP.

Eligible self-employed individuals are allowed a credit against their federal income taxes for any taxable year equal to their “qualified sick leave equivalent amount” or “qualified family leave equivalent amount.”

Disaster Area Tax Relief

A qualified disaster zone or area is a geographical region impacted by major disaster that the President declares as eligible for individual and/or public assistance from the federal government.

The Federal Emergency Management Agency needs to authorize a major disaster declaration before the IRS can grant tax relief. Once FEMA has identified areas for assistance, and the President declares a federal disaster, these areas become IRS Designated Disaster Areas, and the IRS will grant filing and payment relief. See FEMA’s website for a full list of these areas.

Common tax-related actions and authorizations after a major disaster include:

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How Do I Calculate And Claim These Tax Credits

“Average daily self-employment income” is calculated as your net earnings from self-employment during the tax year, divided by 260. You can estimate your available credit using our Tax Credit Estimator.

You can claim a credit for both qualified sick leave and qualified family leave, but not both for the same time periods.

You can claim both the tax credit for paid sick leave and the tax credit for paid family leave on your 2020 Form 1040 tax return. However, you don’t have to wait until the next tax-filing season to benefit from these credits. You can estimate your credits using our Tax Credit Calculator, then simply reduce your quarterly estimated income taxes by that amount.