Claim Your Overlooked COVID-19 Tax Credits: A Guide for Self-Employed Individuals

If you were self-employed in 2021, you might be eligible for significant COVID-19 sick and family leave credits, potentially worth up to $32,220. These credits were introduced to support individuals unable to work due to COVID-19-related reasons, but many self-employed individuals and partners remain unaware of them.

Why Were These Credits Overlooked?

The self-employed COVID-19 sick and family leave credits didn’t receive as much attention as the employee retention credit for employers. Consequently, many tax professionals and self-employed individuals missed out on these valuable credits.

Are You Eligible?

You qualified for these credits if you couldn’t work or telework due to COVID-19-related reasons. This includes situations where you:

• Suffered from COVID-19

• Were under quarantine

• Underwent COVID testing

• Cared for a friend, roommate, or family member impacted by the virus

Breakdown of the Credits

There are four separate credits you could have claimed:

1. Credit for Sick Leave (January 1, 2021 – March 31, 2021)

2. Credit for Family Leave (January 1, 2021 – March 31, 2021)

3. Credit for Sick Leave (April 1, 2021 – September 30, 2021)

4. Credit for Family Leave (April 1, 2021 – September 30, 2021)

• Sick Leave Credit: Covers up to 10 days from January 1, 2021, to March 31, 2021, plus an additional 10 days from April 1, 2021, to September 30, 2021. The maximum credit was $511 per day (or $200 per day if you cared for others).

• Family Leave Credit: Capped at $200 per day, available for up to 50 days from January 1, 2021, to March 31, 2021, and an additional 60 days from April 1, 2021, to September 30, 2021. Initially, this credit was for caring for a child whose school was closed or whose caregiver was unavailable due to COVID. Later, eligibility expanded to include caring for roommates, friends, and relatives.

How to Claim These Credits

If you missed claiming these credits on your 2021 tax return, it’s not too late. Here’s what you need to do:

1. Amend Your 2021 Tax Return: File a completed 2021 IRS Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, along with Form 1040-X.

2. Gather Documentation: To determine your eligible sick and family leave days, review your 2021 calendar, emails, vaccination or medical records, school records, or any other relevant documentation. You don’t need to file this documentation with your amended return, but you should keep it with your tax records.

3. File Within the Deadline: You must file your amended return within three years (including extensions). The deadline is April 18, 2025, or if you filed for an extension, up to October 15, 2025. However, filing sooner will get you your money sooner.

Act Now!

Don’t miss out on these valuable credits. Amend your 2021 tax return today and unlock your potential savings.