Self-Employed Tax Credit for Creatives: 3 Tips from an Expert
When you're in a creative business—whether you're a photographer, videographer, or even social media influencer—you’re probably well-acquainted with the unique challenges that come with the self-employed lifestyle. Navigating finances as a creative means managing fluctuating income, balancing multiple clients, and, of course, handling taxes.
A lesser-known but highly valuable opportunity available to self-employed individuals like you is the Self-Employed COVID-19 Sick and Family Leave Credit. In this post, I’m here to break down this credit, so you can understand how to claim it, why it matters, and where to start if you qualify.
1. Know What the Self-Employed Tax Credit Is and Why It’s Available
The Self-Employed Sick and Family Leave Credit was introduced as part of COVID-19 relief efforts and applies specifically to self-employed individuals. For many, this credit has flown under the radar—probably because it's not as widely publicized as other relief options.
If you were self-employed in 2021 and couldn’t work because of COVID-19 (whether due to illness, quarantine, caregiving responsibilities, or even vaccine side effects), this credit might put some well-deserved cash back in your pocket. Here’s a quick look at the types of credits available:
Sick Leave Credit (Part 1) - Covers January 1, 2021, to March 31, 2021.
Family Leave Credit (Part 1) - Also covers January 1, 2021, to March 31, 2021.
Sick Leave Credit (Part 2) - Expands the sick leave credit period to April 1, 2021, through September 30, 2021.
Family Leave Credit (Part 2) - Similarly expands family leave credits from April 1, 2021, to September 30, 2021.
Each credit has its qualifying criteria and maximum daily payout, which we’ll explore further. The essential takeaway here is that you could be eligible for a credit that compensates you for days lost due to COVID-19.
2. Maximize Your Benefit by Claiming All Eligible Days
One of the key steps to getting the most out of this credit is to carefully document and maximize all eligible sick and family leave days. Here’s how to make sure you’re covering every base:
Identify Eligible Days: Were you unable to work because you had COVID-19 symptoms and needed a test? Did you have to care for a family member who was sick or quarantining? Or perhaps your kids’ school closed, and you needed time off to help them manage their virtual classes. Each scenario is a qualifying event. For January to March 2021, you could receive up to 10 days of sick leave credit if you were unable to work for reasons like these.
Track Sick vs. Family Leave: The amount you can claim varies by the type of leave. For example, if you were personally sick or quarantined, you can claim up to $511 per day for sick leave. But if you were caring for someone else, the family leave amount is $200 per day. So, if you qualify for both sick and family leave credits, maximize the $511 credit first, since it’s worth more.
Document, Document, Document: The IRS isn’t asking for you to submit proof upfront, but if they audit you, they’ll expect you to provide records. Your documentation can be as simple as calendar entries, school closure notices, and even vaccine appointment cards. This step ensures you’re prepared for any follow-up, and helps establish clear, trackable eligibility.
3. Filing Tips and the Timing to Secure Your Tax Credit
Here’s where we get down to the details of making sure your claim is successful and easy.
Claim the Credit on an Amended Return: Because this credit is for 2021, you’ll need to file an amended tax return if you didn’t claim it initially. To do this, you need to fill out Form 7202, which calculates your eligible credit. You’ll then file it along with IRS Form 1040-X to update your 2021 tax return.
Understanding the Timeline: You have until April 18, 2025, to amend your 2021 tax return to claim this credit. While that might seem like a distant deadline, there’s no reason to delay. Filing sooner means you get any refunds faster, plus it reduces the risk of overlooking this opportunity altogether as time passes. If you also filed for an extension in 2021, your deadline could shift—essentially giving you three years from your original filing date to amend your return.
Daily Income Calculations: This part can trip people up, but essentially, you calculate your average daily self-employment income by dividing your net earnings from self-employment by 260 (the IRS standard for working days in a year). This daily figure will determine the maximum daily credit you qualify for. If your net self-employment earnings were higher in 2020, you can use that year’s amount instead of 2021, giving you a bit of flexibility to increase your eligible credit.
Why This Credit Matters for Self-Employed Creatives
We all know that the creative industry doesn’t come with the same perks as traditional employment. There are no paid sick days or built-in family leave. This tax credit is a unique benefit that acknowledges the impact COVID-19 had on self-employed individuals.
It recognizes that, as a creative, when you can’t work, your income stops—but your expenses certainly don’t. This credit isn’t just about tax savings, it’s about compensating you for the real financial impact of COVID-19 on your work and livelihood.
Think of it this way: if you missed out on income due to COVID-19, this tax credit essentially pays you back. And with a maximum potential benefit of $32,220, it’s a game-changer that could help you catch up on lost earnings or invest back into your business—whether that means upgrading your equipment, covering marketing expenses, or just giving you some breathing room.
Final Thoughts: Act Now, Don’t Miss Out
Time flies when you're juggling clients, deadlines, and everything in between. Yet, this is a crucial opportunity you won't want to miss. Many self-employed individuals in the creative industry were unaware of their eligibility for certain credits when filing their 2021 taxes.
The good news? The window to claim these credits is still open. Why wait any longer? By amending your return now, you can expedite your refunds and take control of your financial future.
And remember, you’re not in this alone. Working with a tax professional can simplify the process, ensure you’re claiming the full amount you qualify for, and save you the hassle of navigating IRS forms on your own.
As someone who’s dedicated to helping creatives achieve financial clarity, I can confidently say that credits like these don’t come around often—so make the most of it.
If you have questions or want more help navigating this credit, don’t hesitate to contact us. At Core Group, we’re here to support creative professionals like you in every aspect of your financial journey. From taxes to long-term financial planning, our goal is to help you thrive by focusing on what you do best: creating.
Next Steps to Consider:
Check Your Eligibility: Look back at your 2021 calendar and see if you missed any sick or family leave days that might qualify.
Amend Your Return Promptly: The sooner you file your 1040-X and Form 7202, the quicker you’ll receive your refund.
Consult a Pro (If You Need Help): If tax forms make your head spin, this might be the perfect time to connect with a tax pro who understands the ins and outs of self-employed credits for creatives.
Here’s to taking advantage of every opportunity to strengthen your financial foundation—starting with claiming what’s rightfully yours!
