In March 2020, the Families First Coronavirus Response Act (FFCRA) was enacted into law to aid companies in furnishing paid sick leave and unemployment benefits resulting from the impact of COVID-19. Initially, the FFCRA primarily targeted employers with W-2 employees, offering support to navigate the economic challenges triggered by the pandemic. Subsequently, in December 2020, Congress approved the Coronavirus Aid, Relief, and Economic Security (CARES) Act, extending the coverage of the FFCRA to include not only employers but also self-employed individuals. Thanks to this expansion, self-employed individuals, freelancers, independent contractors, and gig workers are now eligible for tax credits that reimburse them for the income lost during periods affected by COVID. The FFCRA constitutes federal legislation crafted in response to the COVID-19 pandemic. It encompasses provisions for paid sick leave, free COVID-19 testing, food assistance, unemployment benefits, and mandates protection for employer-provided health insurance. For self-employed individuals, the legislation extends equivalent coverage through tax credits, which can be claimed on their income tax returns, effectively reimbursing them for periods of sick leave attributable to COVID-19.

The FFCRA Tax credit, with a maximum potential value of $32,200, is determined by your self-employed net earnings in the years 2020 and 2021. To compute your FFCRA credit, we employ the daily average of your self-employment income, calculated as your net earnings for the taxable year divided by 260. Additionally, we consider the extent of self-employment work missed due to COVID-19-related issues. This calculation enables the IRS to approximate the income lost for each day you were unable to work, providing a basis for determining the credit amount.

At first, the FFCRA targeted employers with W-2 employees. Although the CARES Act, passed later in the same year, expanded the provision of tax credits to include the self-employed, this extension was not extensively promoted. Studies indicate that more than 80% of self-employed individuals are uninformed about their eligibility for FFCRA tax credits.

The Paycheck Protection Program (PPP) and the Families First Coronavirus Response Act (FFCRA) represent separate initiatives addressing the economic repercussions of the COVID-19 pandemic. PPP aids small businesses through the provision of loans, with the possibility of loan forgiveness. In contrast, FFCRA is not a loan but rather a tax credit applicable to taxes individuals have already paid. While PPP is geared towards supporting businesses, FFCRA is specifically designed to assist individuals.

The sum you are eligible to receive is contingent on your average daily self-employment income and the count of days you were unable to engage in self-employed work due to COVID-related issues, encompassing government quarantine orders, self-quarantine, COVID-19 symptoms, and the pursuit of medical diagnosis. The credit for the childcare portion is calculated by multiplying the number of days on leave and taking whichever amount is smaller: • Your average daily self-employment income of year or: • $511. The credit for missing work due to a personal COVID-related issue or due to taking care of another person with COVID is calculated by multiplying the number of days on leave and taking whichever amount is smaller: ‍ • ⅔ of your average daily self-employment income or: • $200. A 1099 Together professional walks you through these simple steps and calculates your maximum FFCRA tax credit for you.

The average refund from a 1099 Together client has received an FFCRA refund of $9,000.

The IRS will send you a check for your 2020 and/ or 2021 FFCRA tax credit to the mailing address we use when filing. Please note that if you have any outstanding tax liabilities, the refund will first be used to offset the tax balance.

The IRS may take up to three weeks to confirm the acceptance of your FFCRA credit application, and subsequently, it can take up to 20 weeks from that acknowledgment to receive your refund through either a check or direct deposit.

Certainly, the deadline for amending your 2020 and/or 2021 tax return to claim or adjust FFCRA credits is three years from the original due date of the return or within two years from the date you paid the tax, depending on which is later. For filing the FFCRA tax credits for your 2020 tax return, the deadline is April 15, 2024, and for your 2021 tax return, it is April 15, 2025.

FFCRA represents a tax credit rather than a loan and is not classified as a grant; rather, it functions as a reimbursement of taxes already paid. The intention behind these tax credits is to address expenses similar to those covered by mandatory paid leave for employees. If you find yourself unable to work due to COVID-19-related illness, caregiving responsibilities, or other conditions hindering your ability to work, these credits are designed to provide compensation for the income you've lost.

Claiming the FFCRA tax credit will not affect the filing of your 2023 annual income taxes. Our team of CPAs will initiate the process of amending the taxes you previously filed for the years 2020 and 2021 to facilitate the receipt of FFCRA tax credits.

To secure the FFCRA tax credits, it's essential to assess your eligibility and modify your 2020 and/or 2021 tax returns along with their supporting schedules. While opting for this amendment, it is advisable to engage a Certified Public Accountant (CPA) for optimal outcomes. However, this process can consume significant time and financial resources. Alternatively, click the "Get Started" button in the top right corner of your screen, respond to the pre-qualification questions, and let 1099 Together handle it for you! Our team of CPAs has developed the quickest, safest, and most user-friendly tool for self-employed individuals and sole proprietors to effortlessly claim the federal FFCRA tax credits they are entitled to.

The IRS is currently addressing a backlog of amended Form 941 filings, owing to the Employee Retention Credit and the Families First Coronavirus Response Act. As a result, there may be a prolonged waiting period before you receive your refunds. Typical wait times vary, with averages often falling within the range of 5 to 8 months for new applications.

To check your refund status, you can directly contact the IRS at (877) 777-4778. Our Customer Support team is also available for updates during your refund process.

The tax code, spanning over 70,000 pages, is too vast to master comprehensively. Our expertise lies specifically in FFCRA & ERC Tax Refunds. This specialization can be likened to the difference between a general practitioner and a neurologist. By concentrating exclusively on this program, our strategic partners possess a deep understanding of the nuanced details, allowing them to proficiently assess your eligibility and precisely calculate your refunds.