New form issued to help self-employed obtain COVID tax credits.

 Although coronavirus[1]related tax credits are for wages paid to employees, self-employed can take comparable credits on their income tax returns when they had to take time off work because they or a family member were affected by COVID-19.

 Self-employed can claim the credits on new Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals. These credits, scheduled to expire at the end of 2020, were extended through Mar. 1, 2021. Qualified individuals will claim the credits on their 2020 Form 1040 (your client may want to file an amended 1040-X) for leave taken between Apr. 1, 2020, and Dec. 31, 2020, and on their 2021 Form 1040 for leave taken between Jan. 1, 2021, and Mar. 31, 2021.

 To be eligible, a self-employed had to have carried on a trade or business during the year and been eligible for qualified sick leave wages under the Emergency Paid Sick Leave Act or, if the individual was also an employee, would have received qualified family wages under the Emergency Family and Medical Leave Expansion Act.

 For details on how to calculate credits, visit eligible self-employed and self-employed who are also employees. [IR-2021-31]