What Is Form 7202 for Self-Employed Individuals?

Form 7202 was a tax form for the 2020 and 2021 tax years created in response to the COVID-19 pandemic. It provided relief to self-employed individuals, including independent contractors and gig workers, by reimbursing them for income lost when they were unable to work for specific pandemic-related reasons.

The credits were first established under the Families First Coronavirus Response Act (FFCRA) for leave taken from April 1, 2020, to March 31, 2021. The American Rescue Plan (ARP) later extended these credits for leave taken from April 1, 2021, to September 30, 2021. If both spouses in a joint filing were eligible, each was required to file a separate Form 7202.

Eligibility for Claiming Leave Credits

To claim the credits, an individual had to be self-employed, regularly engaged in a trade or business, and report income on a Schedule C or as a partner. Eligibility required being unable to work for reasons that would have qualified an employee for paid leave under the FFCRA and ARP. An individual could not claim the credits if they received paid leave wages from an employer for the same period.

The qualifying reasons for taking sick leave were specific. An individual was eligible if they met one of the following criteria:

• Being subject to a federal, state, or local quarantine or isolation order related to COVID-19.
• Being advised by a healthcare provider to self-quarantine.
• Experiencing COVID-19 symptoms while seeking a medical diagnosis.
• Taking time to get a COVID-19 vaccination or recover from it (for leave between April 1, 2021, and September 30, 2021).

For qualified family leave, the criteria focused on caregiving responsibilities. An individual could claim the credit if they were unable to work because they had to care for someone subject to a quarantine order. A primary reason for claiming this leave was the need to care for a son or daughter whose school or place of care was closed due to the pandemic. Maintaining documentation, such as medical records or school closure notices, was necessary to substantiate the claim.

Calculating the Credits and Completing the Form

The basis for calculating the credits is the “average daily self-employment income,” which is the net earnings from self-employment for the tax year divided by 260. Taxpayers could also elect to use their prior year’s net earnings if it was higher, potentially resulting in a larger credit.

Part I of Form 7202 covers the Credit for Sick Leave. If the leave was for the taxpayer’s own health, the credit was the lesser of their average daily self-employment income or $511 per day. If the leave was to care for another person, the daily limit was the lesser of their average daily income or $200 per day. This daily rate is multiplied by the number of days claimed, up to a maximum of 10. For 2021, the 10-day limit for sick leave reset on April 1, allowing a new set of up to 10 days for the period from April 1 to September 30, 2021.

Part II of the form addresses the Credit for Family Leave. The daily credit amount was 67% of the average daily self-employment income, capped at $200 per day. For the 2020 tax year and the first quarter of 2021, this credit could be claimed for up to 50 days for a maximum of $10,000. For the period from April 1 to September 30, 2021, the maximum days increased to 60, raising the potential credit to $12,000.

Part III of the form combines the credit amounts from Part I and Part II. This sum represents the total credit, which is then transferred to the taxpayer’s main income tax return.

Filing Form 7202 with Your Tax Return

Form 7202 was submitted with the annual income tax return, attached to Form 1040. The total credit amount was carried over and reported on Schedule 3 (Form 1040). For 2020 returns, this amount was entered on line 12b. For the 2021 tax year, the credit was reported on line 13b for leave taken before April 1, and line 13h for leave taken after.

The credit itself was refundable, which provided a direct financial benefit. This means that after the credit was used to reduce the income tax owed, any remaining amount was paid out to the taxpayer as part of their tax refund. If the taxpayer owed no tax, they would receive the full amount of the credit as a refund.

Individuals who were eligible but did not claim the credit on their original returns can file an amended return. While the deadline to amend a 2020 return has passed, the deadline to amend a 2021 return is April 18, 2025.