What does the Families First Coronavirus Act provide?
This act, signed by President Donald Trump on March 18, 2020, provides sick and family leave for the self-employed affected by the pandemic. It provides tax credits that can be claimed against your 2020 federal income tax bill. If the credit is more than what you owe in taxes, you will get a refund from the government for the difference. The credit can also be deducted from your quarterly tax payments.
Paid sick leave
If you get sick due to COVID-19 and you’re forced to quarantine or need time off to see a doctor to seek a COVID-19 diagnosis, you can claim the credit for up to 10 sick days in total. Determine your average daily income by taking your net earnings (earnings after expenses) and divide that by 260. Multiply the number of sick days by that number or $511, whichever is less.
Paid family leave
If a member of your family gets sick due to COVID-19 or you have to look after your child due to school or day care closures, you can claim up to 67% of your average daily earnings, or $200 per day, for up to 10 days or a maximum of $2,000, whichever is less.
Emergency family leave
The act also expands family leave. You can claim up to your daily average income for the length of the emergency period, or $200 per day, up to $10,000, whichever is less. But the caregiving leave can be taken for 50 days. Certain restrictions do apply, so make sure to check with the Department of Labor’s guidelines.
What benefits does the CARES Act provide for freelancers?
This act, signed by President Donald Trump on March 27, 2020, took the extraordinary step of extending pandemic unemployment benefits to self-employed people, freelancers and gig economy workers. The Federal Pandemic Unemployment Compensation (FPUC) program, within CARES, is an emergency measure designed to increase unemployment benefits for millions of Americans affected by the pandemic. The FPUC makes an extra $600 in federal benefits available to eligible people who collect unemployment insurance benefits, including regular unemployment compensation, each week through July 31, 2020.
The FPUC program incorporates:
- The Pandemic Unemployment Assistance (PUA) program, which expands unemployment insurance eligibility to freelancers, independent contractors, self-employed workers and part-time workers impacted by the coronavirus.
- The Pandemic Emergency Unemployment Compensation (PEUC) program, which extends unemployment benefits for up to an extra 13 weeks to those who have already exhausted their unemployment insurance.
**Who qualifies for Pandemic Unemployment Assistance (PUA)?
The program expands states’ ability to provide unemployment insurance for many workers impacted by the COVID-19 pandemic, including for workers who were not traditionally eligible for unemployment benefits, like freelancers and gig economy workers.
The act grants these benefits to anyone who has lost work due to one or more of the following COVID-19-related reasons:
- You have been diagnosed with COVID-19 or are experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- You are providing care for a family member or a member of your household who has been diagnosed with COVID-19.
- You’re the primary caregiver for a child or other person in your household whose school or day care facility has been closed due to the COVID-19 public health emergency, and this school or facility care is required for you to work.
- You are unable to reach your place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency.
- You are unable to reach your place of employment because you have been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- You were scheduled to commence employment and do not have a job or are unable to reach the job as a direct result of the COVID–19 public health emergency.
- You have become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID-19.
- You had to quit your job as a direct result of COVID-19.
- Your place of employment is closed as a direct result of the COVID-19 public health emergency.
- You are self-employed, are seeking part-time employment, do not have sufficient work history or otherwise do not qualify for regular unemployment or extended benefits under state or federal law.
How do I apply for assistance?
The Department of Labor recommends you file a claim for regular benefits with the unemployment insurance program in the state where you work. Most states recommend doing this online.
What other COVID-19 relief measures are available?
Under the CARES Act, the federal government has been sending out Economic Impact Payments (EIP) to taxpayers meeting specific income requirements. If you have paid taxes or received refunds by direct deposit in the past, your payment will be deposited directly to your bank account. Otherwise, a check will be sent in the mail.
The CARES Act makes available $1,200 for each adult (up to $2,400 for couples), as well as $500 for each child available to taxpayers who meet the stated income thresholds:
- Individuals who made $75,000 or less ($150,000 for couples filing jointly, or $112,500 for those who file individually as the head of a household) in adjusted gross income based on 2019 income tax returns will receive the full amount.
- The payments will decrease by $5 for every $100 you make over the threshold. Individual check totals start to phase out from $75,000 to $99,000 ($150,000 to $198,000 for couples filing jointly).
- If your 2019 tax return is not available, your 2018 return will be used to calculate your adjusted gross income. Additionally, the April 15th tax-return filing date was deferred by three months, to July 15, 2020, with no interest or penalties.
The CARES Act allowed freelancers and contract workers to apply for Paycheck Protection Loans or Economic Injury Disaster Loans to replace lost earnings or cover expenses, such as rent. Still, because freelancers were only allowed to do so after everyone else, those funds ran out before that was possible.
New legislation was signed on April 24, 2020, providing an additional $310 billion to the Paycheck Protection Program, which provides forgivable loans for businesses with less than 500 employees, including freelancers. It’s not clear how long these funds will last, however.
Other resources for freelancers and gig economy workers
The Freelancers Union provides up-to-date information and resources. It also has a Freelancers Relief Fund to which freelancers from any industry can apply.
Many cities have suspended all eviction proceedings, and the federal government has instructed HUD to do the same. If you live in a Department of Housing and Urban Development property or have a mortgage backed by the Federal Housing Authority, you're safe from eviction and foreclosure right now.
Various grant and aid programs have been created, too. The Gig Workers Collective has created a list of resources to help freelancers and gig workers further.
Gig workers and freelancers contribute a tremendous amount of work and value to the U.S. economy, and these relief provisions recognize those contributions. Until all of America can get out and work again, these measures should help keep freelancers and gig workers afloat.
Nadia Neophytou is a journalist and a writer for MoneyGeek.