By I am bringing to your attention an opportunity that might result in significant tax benefits for you or your corporation—the unclaimed 2020 and 2021 COVID-19 sick and family leave credits.
The IRS allows individuals and corporations to claim these credits to alleviate the pandemic’s impact. But many missed this opportunity on their previous tax returns.
If you did not claim these credits for 2020 and 2021, it’s not too late. You can now claim the credits by filing an amended return. Moreover, if you had a net profit of $143,866 on Schedule C or equivalent W-2 wages from your corporation, you could qualify for up to $32,220 in refundable tax credits.
Here’s a brief breakdown:
- Up to $15,110 under the 2020 rules
- Up to $17,110 under the 2021 rules
The 2020 rules apply from April 1, 2020, through March 31, 2021. For the period from April 1, 2021, through September 30, 2021, there are even more opportunities to qualify for the sick leave credit of up to $511 a day and the family leave credit of up to $200 a day.
To claim the credits, self-employed individuals should file a completed 2021 Form 7202 and IRS Form 1040-X. If your corporation missed the credits, it can amend its payroll tax returns using Form 941-X.
I recommend that you do not delay in claiming these credits. While the IRS provides a three-year window for filing amended returns, it’s beneficial to get that money working for you as soon as possible.
Of course, you need to gather the documentation that validates your tax credit claims.
One key point: you can’t claim a double benefit by using the qualifying wages and monies for other relief programs such as the Paycheck Protection Program loan forgiveness or the Employee Retention Credits.
I would happily assist in filing the amended returns and answering any questions. If you want to get the ball rolling, please call me on my direct line at 408-778-9651.