What Freelancers Need to Know About the Families First Coronavirus Response ActBy Philip Garrity March 25th, 2020
The latest Wall Street estimates sizing up the economic toll of coronavirus are grim: millions of new unemployment claims, record drops in business activity, shrunken global GDP. Freelancers are eyeing the fallout with especially weary eyes.
Freelance contracts are easy targets for budget cuts inside businesses large and small. That makes it hard for freelancers to build a safety net besides a spouse with a full-time job or an emergency fund. Too often, freelancers are left out of the national dialogue around job security and rescue packages.
But thankfully, there’s hope during this crisis. The Families First Coronavirus Response Act has some important provisions for self-employed people affected by COVID-19, and there’s other aid in the flurry of government attempts to stem the financial pain for Americans.
Here’s what freelancers need to know as infections rise and gigs dry up.
(Note from Ed: We’ll update this post when and if more relief becomes available.)
Sick and family leave for the self-employed during coronavirus
On March 18, President Trump signed into law the Families First Coronavirus Response Act, which provides credits for the self-employed that can be claimed against your federal income tax bill. If the credit winds up being more than what you owe in taxes, you’ll get a check from the government for the difference.
Those who get sick due to coronavirus and are forced to quarantine or seek diagnosis can claim either their average daily income (annual earnings divided by the 260 working days in a year) multiplied by the number of eligible sick days, or $511 per business day up to 10 days for a maximum of $5,110—whichever is less.
Caring for family
If a member of your family is sick due to coronavirus or your child requires care due to school closures, you can claim up to 67 percent of your average daily earnings, or $200 per day up to 10 days for a maximum of $2,000—whichever is less.
Emergency family leave
The act helps self-employed coronavirus-affected taxpayers for up to 50 days of emergency family leave. You can claim up your average daily income for the length of the emergency period, or $200 per day up to $10,000—whichever is less.
A delayed tax-filing deadline could spell coronavirus relief for the self-employed
Federal income-tax returns are due on July 15 this year, as opposed to the regular April 15 deadline. No extension request is necessary. This could make a big difference for freelancers who are left with no choice but to dip into money set aside for estimated taxes.
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Photo Credit: sorbetto