This post is written in partnership with GigBack. Gigback helps freelancers receive tax refunds for COVID-19 era losses. Click here to find out if you're qualified.

In the wake of the COVID-19 pandemic, many freelancers and self-employed individuals faced unprecedented economic challenges. To alleviate some of these hardships, the Families First Coronavirus Response Act (FFCRA) was introduced, and then extended to include Self-Employed workers under the American Rescue Plan Act (ARPA) to assist those who faced work disruptions due to quarantine, caring for a loved one affected by COVID-19, or taking care of children whose schools were closed. This expansion is colloquially referred to as the Self-Employed Tax Credit (SETC). This financial incentive has been a lifeline for many freelancers, providing up to $32,200 in much-needed relief during tough times.

What is the sick and family leave tax credit?

This is a tax credit specifically designed for self-employed individuals, including freelancers, gig workers, and solopreneurs, who were unable to work for COVID-19-related reasons. Unlike traditional employees who may receive sick leave or family leave benefits from their employers, freelancers often lack such safety nets. This tax credit was expanded to self-employed workers to bridge this gap, offering a financial cushion to those who had to stop working due to illness, caregiving responsibilities, or other pandemic-related disruptions.

How does the tax credit work?

This tax credit allows eligible self-employed individuals to claim up to $32,2000 in refundable tax credits for qualified sick leave and family leave. This means that if you had to take time off work due to COVID-19—whether to care for yourself, a family member, or because your business was impacted by the pandemic—you could be eligible for a direct payment through the tax system.

One of the most significant advantages is that it is not a loan or a deduction; it’s a direct payment to your bank account. This distinction is crucial because it means you don’t have to worry about repaying the amount or meeting complex eligibility criteria. If you qualify, the money is yours to keep, providing a substantial financial boost when you need it most. However, the time to file is running out, as the deadline is April 15th, 2025.

Why is it Beneficial for Freelancers?

Freelancers operate in a unique space, balancing the demands of running a business with the uncertainties of fluctuating income. The pandemic exacerbated these challenges, making financial stability even more elusive. Here’s how the sick & family leave tax credit can benefit freelancers:

Direct Financial Relief: The tax credit can provide up to $32,200 for the years 2020 and 2021. For many freelancers, this amount can make a significant difference, helping cover living expenses, pay down debt, or reinvest in their business.

No Repayment Required: Unlike loans or advances, this is a refundable tax credit, meaning there’s no repayment obligation. This financial support is yours to use as you see fit, without the burden of future financial commitments.

Simplified Application Process: Applying is straightforward, especially with platforms like GigBack that streamline the process. In just a few minutes, you can submit the necessary information and let dedicated CPAs handle the rest. You can learn more and get started here.

Support for Family and Personal Leave: The IRS recognizes the unique challenges faced by freelancers who may have had to care for family members or take personal leave due to COVID-19. This support acknowledges the real-life implications of the pandemic on work-life balance.

Reinvestment in Your Business: The funds received through this tax credit can be reinvested in your business, helping you bounce back stronger. Whether you need to upgrade equipment, invest in marketing, or simply maintain your operations, this financial boost can be pivotal.

How to Take Advantage of this Tax Credit:

To access this pandemic-era relief, freelancers must file the appropriate forms with the IRS. While the process is relatively simple, working with a trusted platform like GigBack can make it even easier. 

GigBack’s team of experts can guide you through the application process, ensuring you receive the full benefits you’re entitled to and granting you seamless access to a world-class team of accountants. As part of their exclusive partnership with the Freelancers Union, the processing fee has been discounted from $150 to $99, and the processing fee is 100% refundable in the case you do not qualify. If you do qualify, CPAs will prepare your amended Tax Returns, triple-check for accuracy, and send them to the IRS for processing, so you can sit back and relax knowing that your refund is on its way.

By providing direct financial relief, the sick & family leave tax credit helps freelancers maintain their livelihoods, care for their families, and continue pursuing their passions. If you’re a freelancer affected by the pandemic, exploring this tax credit could be one of the most important steps you take toward financial recovery.

Click below to calculate your benefit estimate and see if you qualify: