• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube
Big Ideas for Small Business logo

Barbara Weltman

Big Ideas for Small Business, Inc.

Whitepaper download

Subscribe and download our eBook, "150+ Tax Deductions for Small Business A to Z."

This field is hidden when viewing the form
Get the:

  • Home
  • About Us
  • Big Ideas For Your Business
    • Idea Of The Day ®
    • SMB Legal
    • SMB Taxes
    • SMB Financial
    • Small Business
    • Newsletter Archive
  • Services
  • Books
  • Blog
  • Multimedia
    • Videos
    • Radio Shows/Podcasts
  • Be a Guest Blogger

Roundup of COVID-19-Related Breaks for Self-Employed Individuals

January 28, 2021 / By Barbara Weltman

COVID-19-Related Breaks for Self-EmployedMuch of the government relief provided to small businesses was keyed toward their employees. They could qualify for the SBA’s EIDL grant of $1,000 per employee (up to a max of $10,000). They could claim a tax credit for keeping employees on the payroll (“employee retention credit”). And employees could avail themselves of a number of breaks, including regular and extra unemployment benefits, paid sick leave, and paid family and medical leave (paid via the employers’ employment tax credits).

But what about self-employed individuals—independent contractors, freelancers, and gig workers—who work alone, without any employees? What breaks do these self-employed individuals qualify for? Various breaks apply, with some modifications, to self-employed individuals.

Financial assistance

Self-employed individuals are eligible to request PPP loans, EIDL loans, and direct payments to “shuttered venue operators,” such as talent agents representing live performers. Because self-employed individuals do not receive salaries, special rules determine their “payroll costs” for these programs (“lost 1099 income”). Essentially, the amount of net earnings from self-employment is capped at $100,000.

Self-employed individuals can apply for PPP loans, round 2 PPP loans, EIDLs, and direct payments to “shuttered venue operators.” Nav has guidance for self-employed individuals on applying for these programs now.

Tax credits equivalent to employer credits for paid sick leave and paid family leave

Small employers were required to provide paid sick leave and paid family leave to employees impacted by COVID-19 (e.g., being ill from it; having to care for a child whose school or daycare center was closed because of the pandemic). Employers paid for these employee benefits through employment tax credits. These credits are extended through March 31, 2021.

Self-employed individuals impacted by the pandemic like employees are eligible for income tax credits equivalent to the employment tax credits of employers. The credit is based on average daily self-employment income from net earnings for the period. For 2020, this can be determined by dividing annual net earnings by 260. You can elect to use your average daily self-employment income from 2019 in figuring your 2020 credit amounts. Their credits can also run through March 31, 2021, which should be factored into estimated taxes for 2021.

The credit for self-employed individuals is figured on new Form 7202. You can find more information in IRS FAQs (#60-#68), including how to figure the credit if a person also received employee benefits through a job and guidance on the documentation establishing eligibility for the credits that must be maintained.

Pandemic unemployment assistance (PUA)

By definition, self-employed individuals are not employees and do not qualify for unemployment (they aren’t employed so they can become unemployed). However, Congress created some assistance to self-employed individuals who find themselves unable to work because of the pandemic. The federal assistance is administered through state unemployment programs.

  • Original PUA. This was a weekly payment up to $600 that ran for 24 weeks. This program ended in July.

  • New PUA. This is an additional weekly payment of up to $300 for up to 11 weeks. The second round of assistance runs to March 14, 2021.

Remember that PUA payments are taxable income. This should be factored into estimated tax payments for the year.

Final thought

As of March 2020, there were 24.8 million small businesses with no employees. This means most owners are self-employed and work alone. How many are still in business now? Who knows? But if self-employed individuals are going to continue, government help is needed for many of them.

Tags COVID-19-related breaks independent contractors pandemic pandemic unemployment assistance PPP loans self-employed individuals

Primary Sidebar

Categories

  • General Business (498)
  • Guest Blog (109)
  • Homepage (21)
  • Small Business (990)
  • SMB Financial (322)
  • SMB Legal (66)
  • SMB Taxes (324)

Barbara’s Recent Posts

  • Scale Your Business by Stepping Up IP Protection May 29, 2025
  • Disasters Happen: It’s Important to Be Prepared Now May 27, 2025
  • How Work Order Software Transforms Small Business Operations May 26, 2025
  • The Numbers Are Up for Sole Proprietorships May 22, 2025
  • New Business or Project Crowdfunding: What To Know May 20, 2025
  • Old-School Estimating vs. Smart Solutions: What’s Really Holding You Back? May 19, 2025
  • Employees Getting Called to Public Service: What to Know May 15, 2025
  • Not Too Late to Prep for Summer Now May 13, 2025
  • How Will the Next Generation of Learners Affect the Workplace May 12, 2025
  • Moms Know Best: Lessons for Entrepreneurs May 8, 2025
  • Mental Health Challenges in the Workplace May 6, 2025
  • Let’s Celebrate Small Business! May 1, 2025
Awarded Top 100 Small Business Blog medal (link will open in a new window or tab)
Marquis Who's Who 2023 Badge
Top Small Business Blogs (Link will open in a new window or tab.)
8 Financial blogs small business Owners Need to Read. Invoice home.  (link will open in a new window or tab)
Best Small Business Blog, Expertido.org
Top 50 Small Business Blogs 2018
Best Small Business Blogs
BizHumm Top 100 Business Blog Award to Barbara Weltman
FitsSmallBusiness.com: Award for Best Small Business Blog 2017 (link will open in a new window or tab)
FitsSmallBusiness.com: Award for Best Small Business Blog 2016 (link will open in a new window or tab)

Footer

Big Ideas for Small Business logo

Small business ideas, business tax news and small business consulting from Barbara Weltman to provide business owners with the information they need to succeed. Visit our small business blog, Idea of The Day®, small business books and articles on small business taxes, small business finance and small business legal advice.

Contact Us

[email protected]

(772) 492-9593

gacor maxwin situs slot thailand terpercaya situs slot gacor situs gacor akun pro thailand slot bandar togel terpercaya

Latest Tweets

bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
May 31

Starbucks Rediscovers Its Human Side - Branding Strategy Insider https://bit.ly/3H9KwHP #smallbusiness #branding #marketing

Reply on Twitter 1928884285445931367 Retweet on Twitter 1928884285445931367 Like on Twitter 1928884285445931367 2 Twitter 1928884285445931367
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
May 31

New Business or Project Crowdfunding: What To Know - https://bit.ly/43nclnL #startups #loans #crowdfunding #smallbusiness

Reply on Twitter 1928862798886441182 Retweet on Twitter 1928862798886441182 Like on Twitter 1928862798886441182 1 Twitter 1928862798886441182
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
May 31

10 Simple Ways to Get Employees to Quit — Improve Your HR https://bit.ly/44KRu01 #smallbusiness #workplace #hiring #employees

Reply on Twitter 1928844506998136977 Retweet on Twitter 1928844506998136977 1 Like on Twitter 1928844506998136977 1 Twitter 1928844506998136977
Load More

Copyright © 2008–2025 Big Ideas for Small Business, Inc  |  Designed by Hudson Fusion

  • Privacy Policy
  • Sitemap