What Is IRS Form 7202 and Who Can Claim the Credit?

IRS Form 7202, “Credits for Sick and Family Leave for Certain Self-Employed Individuals,” was created to provide financial support to independent workers during the COVID-19 pandemic. It allowed eligible self-employed individuals, like freelancers and independent contractors, to claim refundable tax credits for periods they were unable to work. These credits were established under the Families First Coronavirus Response Act (FFCRA) and were available for leave taken from April 1, 2020, to September 30, 2021. The credits are not available for any period after 2021.

Determining Your Eligibility

To claim these credits, an individual must qualify as a self-employed person for tax purposes. This includes those who file a Schedule C, Schedule F, or partners in a partnership who report income on a Schedule K-1. Eligibility rested on having net earnings from self-employment and being unable to perform services for specific, qualifying reasons.

The reasons for being unable to work were directly tied to the COVID-19 public health emergency. An individual could not have received paid leave from an employer for the same period and had to meet one of the following conditions:

• They were subject to a government quarantine or isolation order.
• They were advised by a healthcare provider to self-quarantine.
• They were experiencing symptoms of COVID-19 and seeking a medical diagnosis.
• They were caring for a person subject to a quarantine order.
• They were caring for a child whose school or childcare provider was closed or unavailable due to COVID-19 precautions.

Information and Documentation Needed

To complete Form 7202, you needed your net earnings from self-employment for the tax year, which can be found on Schedule SE (Self-Employment Tax). This figure is used to calculate the credit amounts. You also must have the specific dates for each day of leave you took for a qualifying reason.

Maintaining detailed records is important for substantiating your claim, even though these documents are not filed with your tax return. This documentation should directly support the reason for your leave. Examples include a copy of a government quarantine or isolation order, or written advice from a healthcare professional recommending self-quarantine.

For leave taken to care for a child, you should keep records of any notices from the school or place of care detailing its closure. Having these records organized provides the necessary proof if the IRS has questions about your claim.

Calculating the Credit Amount

The credit calculation is divided into two parts on Form 7202: sick leave and family leave. Both calculations are based on your average daily self-employment income, which is determined by dividing your total net earnings from self-employment for the year by 260.

For the qualified sick leave credit in Part I, the daily amount depends on the reason for the leave. If you were unable to work due to your own quarantine or symptoms, the credit is the lesser of your average daily income or $511 per day. If you were caring for someone else, the daily limit is the lesser of two-thirds of your average daily income or $200 per day. This credit is capped at 10 days.

The qualified family leave credit in Part II applies when you could not work because you had to care for a child whose school or care provider was unavailable. The daily credit is limited to the lesser of two-thirds of your average daily income or $200 per day. For 2020, this credit was available for up to 50 days with a $10,000 maximum. For 2021, the limit was increased to 60 days with a $12,000 maximum.

Any sick or family leave wages received from an employer for the same period reduced the amount of credit that could be claimed.

Completing and Filing Form 7202

After calculating the credit amounts, the figures were transferred onto the corresponding lines in Part I and Part II of Form 7202. The form and its instructions can be found on the IRS website.

Form 7202 is not filed by itself but must be attached to your annual income tax return, such as Form 1040. The total credit amount calculated on Form 7202 is then carried over and reported on Schedule 3 (Form 1040).

Because the credits are refundable, if the amount of the credit is more than the tax you owe, you will receive the difference as a refund. These credits were only available for the 2020 and 2021 tax years. While it was possible to claim them by filing an amended return (Form 1040-X), the deadlines to do so for both years have now passed.