IRS Releases Draft of Form For Self-Employed Individuals To Report Sick Leave And Family Leave Credits
The IRS has released a draft of Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, for self-employed individuals claiming qualified sick leave equivalent (or qualified family leave equivalent) credits.
The Families First Coronavirus Response Act allows a self-employed individual a refundable credit against income tax imposed on self-employment income for qualified sick leave equivalent amounts and qualified family leave equivalent amounts related to the paid leave requirements due to certain circumstances related to COVID-19.
The qualified family leave equivalent amount for an eligible self-employed individual is an amount equal to the number of days (up to 50) during the taxable year that the self-employed individual can’t perform services for which that individual would be entitled to paid family leave, multiplied by the lesser of two amounts: 1) $200 or 2) 67% of the average daily self-employment income of the individual for the taxable year.
Self-employed individuals claiming qualified sick leave equivalent or qualified family leave equivalent credits will need to complete and file Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, when it is released, with their individual income tax return. Only a draft version of Form 7202, without form instructions, has been released so far.
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