If you filed a Schedule SE and reported positive net income in 2020 or 2021, you could be eligible to receive up to $32,200.
But you only have until April 2024 to complete and submit your FFCRA filing. These are the last remaining COVID relief funds through the self-employed tax credit.
In this webinar, we answer your questions to help you maximize the money you receive. And we’ve partnered with Adesso360 to make filing easy. Get started with your FFCRA Filing today to be sure everything is filed by April 15. (Watch the webinar, listen to the podcast, or see the transcript below.)
CRES Webinar: How to Complete your FFCRA Filing for COVID relief through the self-employed tax credit
David Allen, Adesso360:
Welcome to the FFCRA presentation with CRES. Today we’ll be sharing with you how you can access this last remaining COVID relief money.
We want you to get as much of this free money as possible. You really don’t “apply” for your FFCRA credits because there’s no approval process. If you are an independent contractor, then you’re eligible.
The most important points we’ll cover are:
- How do you apply
- How long does it take for you to get the money
- Are you eligible
- What do you need to do
We have partnered with CRES to assist everyone in our industry in accessing what are the last remaining COVID relief funds that are available. Many of you are familiar with the PPP, or the Payroll Protection Program, which was a forgivable loan. You’re also probably familiar with ERC or Employee Retention Credit, which was tax credits for businesses. The FFCRA money we’re talking about today is available for independent contractors.
This is free money for anyone that filed as an independent contractor in 2020 or 2021. And you are eligible to receive up to $32,200 in the last remaining COVID relief funds. But you do have to file to get the maximum available to you.
The most important date is April 1, 2024. After April, half of the self-employed tax credit under FFCRA goes away (because you have to apply for 2020 credits by April 1, 2024).
After April 2024, you can only apply for 2021 credits, but if you apply now, you get both years. That is so incredibly important.
Let’s talk about what FFCRA (or SETC, the Self-Employed Tax Credit) is. First, it’s a tax credit for anyone that was a self-employed individual in 2020 or 2021.
If you filed a Schedule SE as a self-employed individual, and you had positive net income, you were actually eligible to get sick days and family care days. In 2020 and 2021, we were all very sensitive to if we had COVID, if we came in contact with somebody who had COVID, or maybe if we were even concerned that COVID was in the general vicinity of where we were. We were told to go and isolate for 10 days. There were no doctor’s notes or confirmation. There is simply your honesty that you went home, and you isolated for a period of time because you were told that’s what you were supposed to do, and that’s how you are able to decide and choose your sick days.
Now, as it pertains to family care days, you must have children (or be caring for an elderly individual who is a dependent). For those of you that no longer have children living at home because they are grown, or if you do not have children, you are only eligible for the sick days portion of FFCRA. For those of you that do have children, you are eligible for the full amount that includes not just the sick days, but the family care days. Anybody that had a child that was homeschooled, you get to be paid for those days and that’s what FFCRA is. Now, I’m going to play a video for you that goes through the process of applying.
The FFCRA is a federal program that compensates eligible self-employed individuals for up to 130 days of missed work due to COVID-related issues. This is not a loan, but a refund on taxes you have already paid in 2020 or 2021 up to $32,220. The IRS issues this as a tax credit.
Filing with the IRS can be challenging, so Adesso360 can do it for you. On our portal, you’ll apply for your FFCRA tax credits. We’ll take care of amending your tax returns and submitting your application to the IRS, so you can get back to doing what matters most, running your business.
- First, enter the dates you are unable to work due to COVID-related concerns. For example, your child’s school was closed or went virtual due to COVID lockdowns, or you experienced COVID-like symptoms. It is up to you to make sure the information you enter is accurate.
- To estimate your tax credit, provide how much you earned as a self-employed individual in 2020 and 2021.
- Verify your identity by taking a picture of the front and back of your government issued ID.
- Provide your mailing address and job information. These 2020 refunds can only be issued as a check from the IRS, so make sure the address you list is correct.
- The IRS also requires your social security number to file your application. Don’t worry, we use the highest level of encryption to protect your personal data.
- To amend your taxes, double check the data you provided is correct, then add your signature to tax information authorization 8214 required by the IRS. Your FFCRA tax credits will then be calculated within 48 hours.
Once you have received your FFCRA calculation, enter any dependents you included when filing your 2020 and 2021 taxes, as well as spousal information if you file jointly.
You’ll also be notified if your spouse qualifies for FFCRA tax credits.
There will be an official statement to the IRS explaining why you qualify for FFCRA relief. Most of this information will be pre-populated, but we’ll need a few more details including the names of the individuals you cared for, names of your healthcare providers and names of the schools or places of care that were closed because of COVID. Certify and sign, then complete the Adesso agreement. This form gives us the authority to submit your amended tax documents on your behalf to the IRS.
Select from our easy and flexible payment options. You’ve made it to the last step: E-signing your amended documents. Once you’ve signed the forms, we’ll complete your FFCRA application, request your signature and submit to the IRS.
Your 2020 FFCRA refund will be issued directly from the IRS as a check to the mailing address on file. Your 2021 FFCRA refund can be issued as a check or deposited directly into your provided bank account from the IRS. The IRS’s current processing timeline for refunds can take up to 20 weeks. We’ll send an email indicating your entire FFCRA package has been uploaded to your portal for downloading at your convenience.
David Allen:
Remember, if you filed a Schedule SE as a self-employed individual, and you have a positive net income, you are absolutely eligible for the FFCRA tax credit. Whether you’re going to get $5,000 back or $25,000 back or the full $32,000 back, you are eligible.
Let me tell you how you can double down. Many people have significant others as joint filers who are also independent contractors. Well, that enables you to get not just $32,200, but literally, another $32,200, so you can double the amount.
Now, let’s talk about how you claim your funds:
- First, go to cresinsurance.com/taxcredit and click the ”get started” link.
- You’ll set up your email address and your password (so that you can come back in when you receive an email from us to complete the process.)
- Choose the amount of net income you have, and based on that, it’s going to tell you how much money you should anticipate.
- The next step is really such a critically important step, and that is your date selection. Now, remember, for sick days, you should be choosing the maximum number of days for 2020 and 2021.
Now, not if you actually weren’t sick, but there were very few people who weren’t required to quarantine because they knew somebody who was sick, or they felt like they were sick because that’s all that was required during COVID days. You should be choosing the maximum number of days for when you were sick. You can click a date range because it’s more probable if you went home and you were quarantining for 10 days, you’re going to choose the first day and the last day and it’s going to add up those full 10 days that you quarantined. That’s on sick days. Next, family care days, you should also be choosing if you have children, or if you’re taking care of an elderly person identified as a dependent, then you can claim them as well.
Josh from Adesso360:
Note that if the kids are not yet in school but require a nanny or any assistance at all in caring for them, whether they go to a nursery school, a daycare center, or even a nanny comes to the home, if their schedule has been disrupted due to COVID, due to the lockdowns, then you’re eligible to claim those days.
David Allen:
So back to choosing the calendar days: choose the dates that you were home, choose the dates that you were watching your children. If you applied for unemployment, you can’t “double dip.” You can log onto your state’s unemployment website and print out all the dates that you applied for unemployment and just make sure you’re not choosing the same dates.
There is a $150 verification fee that you pay when you file with us that is credited back to you at the end of the process. Here’s how it works . . .
We email you within about 24 hours of your filing with us, and we’ll tell you how much you’re going to be getting back, based upon the net income you entered and the number of days that you chose.
In the meantime, we have pulled your 2020 and 2021 tax returns. Within 48 hours of your filing, you’ll receive a second email that verifies the amount of your credit based on your tax returns.
Now you will complete the process and pay for the service at 20% of your tax credit MINUS the $150 you’ve already paid, using one of three options:
- You can pay the 20% fee in full through the PayPal link.
- The other option is PayPal Pay in 4. They split up the payment with zero interest into four payments every two weeks.
- Use the financing option through PayPal for either 6, 12, or 24 months with the first payment being 30 days after you’re approved. You’ll end up making two, maybe three payments before you get your refund back from the IRS. Then you get to choose to either pay off PayPal or continue to make the monthly payment.
In two to four weeks, you can log onto the IRS website and see the progress of your application. In addition to that, because for 2021 we’re electronically filing, it’s usually not taking 20 weeks. It’s taking our clients 8, 10, 12 weeks to get their money.
As long as you filed a Schedule SE and have positive net earnings, you’re going to get that money. Make the $150 payment, wait those 48 hours, complete the process, make that PayPal payment and then just sit back and wait to get that refund.
The real estate industry is getting some of the highest refunds that we’re seeing, in the high $20,000s to the low $30,000s consistently.
Before we jump into questions, let’s confirm how real FFCRA is. It can be found directly on the IRS website. (Note that if you search for FFCRA on Google, it’s going to tell you all about the program that has expired for employees because that’s originally what FFCRA was. However, it was modified by the Biden administration to include self-employed individuals, only those who filed a Schedule SE and have positive net earnings.)
Question: I don’t have children but had a parent I claimed as a dependent, would that count?
David Allen:
Yes, it would. If you are claiming that parent as a dependent, you absolutely are eligible for the family care days as well.
Question: Will we know the amount of FFCRA we will be getting once we fill out the application or file?
David Allen:
Yes. You first estimate the amount based on the net income you enter; our website gives you an idea of what your amount is. Then when you make the choices for the dates, it will tell you at the end of day one (in our first email to you) how much you’re getting back.
Question: Can you please clarify 130 days, is that 130 days per year?
Josh:
Well, for 2020 and for 2021, everybody is allowed 10 sick days for each year. However, for 2020, everybody is allowed up to 50 family care days. Then for 2021, you can have up to 60 family care days.
Question: How do I know if I filed a Schedule SE?
David Allen:
Review your copy of your tax returns and look in the schedules for Schedule SE, or call your CPA to confirm you filed a Schedule SE. It’s highly likely that if you were an independent contractor, you filed a Schedule SE. If your net income exceeds $400 as self-employed income, you’re required by the IRS to submit a Schedule SE.
Question: Is there a way to get everything submitted before the credit is reduced?
David Allen:
Yes, it shouldn’t take you more than a few days to file and complete the process. Once you get started, you should be able to get through your initial steps in a matter of 15 or 20 minutes. Once you receive the email from us to complete the process, the next steps should take even less. So, you should absolutely be able to complete the process in a matter of days.
Question: Regarding the calendar and selecting the dates if you have no dependents. What days can you select for your own personal sick days if you don’t have records.
David Allen:
The only restriction you would have is if you filed for unemployment, you couldn’t choose unemployment days and sick days as well. Then it is on the honor system. What you should do is take a look at your calendar and determine when you probably isolated at home. It may have happened multiple times, but again, because you were recommended by the government to quarantine for 10 days and there’s only 10 days of sick days for 2020 and 2021, you should do your absolute best to determine when you needed to isolate and then choose those days.
Question: If I choose to pay the 20% service fee with the PayPal in 4 option, will the four payments be with zero interest, and will the four payments with zero interest be completed prior to me receiving my check from the IRS?
David Allen:
Because it’s taking 8, 10, 12 weeks for the credits to be sent or deposited to clients, it is possible that you will have already made four payments prior to receiving your money. Then again, maybe you’ll have only made three payments. We really can’t tell you that.
Question: If I have a pin code with the IRS to pull my tax return, does Adesso360 need that pin code?
David Allen:
Actually, all we need is your authorization. We don’t need your pin code, we don’t need anything special from you, except for your authorization, so we have all of the accurate data.
Question: Why pay Adesso360 and not have my CPA fill this out for me at their hourly rate and save the 20%?
David Allen:
You absolutely can use your CPA, but we have done tens of thousands of these filings and there’s nobody with greater expertise on this topic. We’ve created an incredibly easy process. We know how to make sure our clients maximize their return. Secondly, we are electronically filing 2021, which substantially expedites the payments. Instead of 15 or 20 plus weeks, our average right now is 8, 10, 12 weeks.
Question: Is the $150 fee per year and 20% of our refund?
David Allen:
That $150 fee is credited back towards that 20% fee.
Question: I can’t qualify for 2020 because I had a loss, but I do have positive earnings for 2021. Can I file for only 2021?
David Allen:
Yes. That is such an important point because there were many people who had real struggles in 2020, and they saw things turn around in 2021, which is absolutely fine as long as you had positive net income in either one or both years.
Question: My child was in college when COVID started, but then had to move home when in-person classes were canceled for the semester. Can he be claimed in FFCRA?
Josh:
As long as you claim him as a dependent whether in preschool or college, you can claim him on your FFCRA.
Question: Will this increase our chances of being audited by the IRS?
David Allen:
When the CARES Act was passed and this money was made available for independent contractors, it is simply a credit towards the income that you have received. It in no way puts a light on you to receive any type of audit. You are simply eligible to receive this tax credit because you are a self-employed individual with positive net earnings.
Question: Will I be taxed on the credit in my 2024 tax return?
David Allen:
There is no taxation on these funds. It is a refund, and you are not taxed on this refundable amount.
Question: I am set up as an LLC, so does that mean that I am not eligible? I am not seeing a Schedule SE.
David Allen:
For single-owner LLCs, your CPAs could have filed a Schedule SE, or they may not have. It just depends on how your CPA filed your taxes. Again, if you own an LLC, you very well may have filed a Schedule SE. You need to check your taxes or check with your CPA.
Question: What number are they looking for as income on the Schedule SE, the adjusted gross or the taxable income? Is that line 31?
David Allen:
It is line-item number 31, and it is your net income.
Question: Where is the link to start the application on the CRES website?
Jordan:
Visit cresinsurance.com/taxcredit.
Question: If my kids had to go to virtual school for the remainder of 2020, do those count as family care days?
David Allen:
Absolutely, they do. If they were not in school and they were at home, then those are absolutely family care days.
The real estate industry is such a prime industry for this refund. Our average income is higher and there are such a large percentage of us that have dependents, which makes us eligible for the maximum amount of refund. So many of our significant others are also agents or also filed a Schedule SE, so many applicants are seeing $40,000 or $50,000+ because of their dependents and their joint filers.
Question: Do you provide phone support?
David Allen:
Yes, we do provide phone support. We recommend that you click on the link and schedule a time and one of our representatives will gladly have a call and address any of the questions you may have. They will literally walk you through the process if that’s what’s needed.
Question: Do mandatory lockdown days count?
David Allen:
Absolutely, they do.
Question: Is financing available for the 20% fee?
David Allen:
You can choose financing options through PayPal, either the Pay in 4 option, or the 6, 12, and 24-month option, so that you only pay a small amount on a monthly basis.
Question: I have no children or other dependents, so can I only get 10 sick days and nothing else? 10 sick days per year and nothing else?
David Allen:
That is correct. If you have no children or no elderly dependents that you claim, then you are only eligible for 10 and 10. 10 sick days in 2020 and 10 sick days in 2021.
Question: How are the fees calculated?
David Allen:
The way the fee is calculated is based on 20% of your refund minus the $150 verification fee.
Question: I operate under an S-Corporation, and it looks like I filed an 1120-S. Does that count?
David Allen:
Unfortunately, if it’s not a Schedule SE, 1120-S does not qualify.
I want to thank you all for participating and spending all this time with us here today and hopefully, we’ve answered all your questions. Please don’t miss out, get started, go through the process, so you get your refund. We look forward to helping you as you complete this process and supporting your requirements.
