What Is The FFCRA Tax Credit — Families First Coronavirus Response Act?

In March 2020, the Families First Coronavirus Response Act (FFCRA) was signed into law to help companies offer paid sick leave and unemployment benefits caused by COVID-19. Most of the commentary and publicity regarding the FFCRA focused on employers with W-2 employees to help them weather the economic impact caused by the pandemic.

Many people are unaware that the FFCRA included provisions to help self-employed individuals as well. Under Sections 7002 and 7004 of the FFCRA, self-employed individuals who were unable to work during certain periods in 2020 and 2021 because of COVID-19 may be entitled to tax credits intended to lessen the economic impact of the pandemic. Self-employed individuals, freelancers, independent contractors, and gig workers, therefore are also eligible for tax credits that pay you back for the time you would’ve normally spent earning money that was lost because of COVID.

APPLY FOR your ffcra tax credit

Unlike the Paycheck Protection Program (PPP), the FFCRA is not a loan but a retroactive tax credit of your 2020 or 2021 income taxes and will either reduce the current amount you owe the IRS or be sent directly to you in the form of a check or ACH deposit, depending on your tax status. Any FFCRA credits sent directly to you can be spent however you need and never need to be paid back.

Who qualifies for the FFCRA Tax Credit?

To qualify for the FFCRA, you must meet three factors:.

1

Identify as a Self-employed individual. A few examples, but not limited to, include:

  • Rideshare, food, or product delivery drivers
  • Gig workers
  • Earning an income via e-commerce sites like eBay, Etsy, Amazon, etc.
  • Running a freelance business where you provide services to another company but are not directly employed by them
  • Sole proprietors
  • Independent contractors (1099 workers)

2

Have filed a Schedule SE of IRS Tax form 1040 in 2020 and/or 2021 with a positive net income and paid self-employment tax on your earnings.

3

Have missed work due to Covid-related issues


Unfortunately if you were an employee who received a W2 form in 2020 or 2021, your employer might have already claimed the FFCRA to cover your sick leave, making you ineligible to apply through Madison Tax Group.

Who qualifies for the FFCRA Tax Credit?

The FFCRA allows for a 1099 contractor or self-employed individual to qualify for paid sick time if they were unable to work or telework because of COVID-19. A few qualifying reasons include, but are not limited to:

  • Following a federal, state or local quarantine or isolation order;
  • Advised by a healthcare provider to self-quarantine;
  • Experienced Coronavirus symptoms and were seeking a medical diagnosis;
  • Caring for a child or other individual, who was subject to an government-issued or self-quarantine restriction;
  • Caring for a child whose school or daycare was closed or unavailable.
  • Obtaining a COVID-19 vaccination*
  • Recovering from illness related to the COVID-19 vaccine*
  • Seeking or waiting for the results from a COVID-19 test*

Note: reasons with * only apply if you’re seeking credit for dates between April 1, 2021 - September 30, 2021.


How do I apply for the FFCRA credit?

It’s easy!

Step 1

Visit Madison Tax Group. (You’re already here, good job!)

Step 2

Confirm your eligibility. Use our pre-qualification survey to see if you qualify and to calculate your estimated tax credit.

Step 3

Get your previous tax statements together and start the application. We’ll need a few details from you about the dates you’re applying for and the income earned in 2020 and 2021. By having Madison Tax Group handle these steps, you’ll save 10+ hours.

Step 4

Sign a few docs, upload your ID info, and select your payment options.

Step 5

Payment. Madison charges a 20% processing fee (based on your total refund) along with a $150 non-refundable verification fee that will be deducted from your overall processing fee.

Step 6

Submit your application directly to the IRS via Madison Tax Group. Our streamlined process does the heavy lifting for you so just sit back and relax!


Let's check to
see if you qualify

You could be eligible for up to $32,220 in FFCRA relief funds!

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Still unsure? Check your Form 1040 in 2021. If line 31 is blank or has $0, select “NO”.

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Determine my Eligibility
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*Madison Tax Group can only manage the process of claiming tax credits under the FFCRA for taxpayers that e-filed their original tax returns. If your 2021 tax returns were paper filed, please reach out to your financial advisor for the next steps.

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Need help? Email:
ffcra@madisontaxgroup.com