Tax Tip for Real Estate Professionals – New Coronavirus Stimulus Bill Includes Tax Credit for Family Leave for Certain Self-Employed Individuals

Tax Tips for Real Estate Professionals

Section 9643 of the Act adds a credit for eligible self-employed individuals (Realtors, Brokers, and Real Estate Professionals) equal to 100 percent of the qualified family leave equivalent amount with respect to the individual. The term ”eligible self-employed individual” means an individual who (1) regularly carries on any trade or business within the meaning of Code Sec. 1402, and (2) would be entitled to receive paid leave during the tax year pursuant to the Emergency Family and Medical Leave Expansion Act if (i) the individual were an employee of an employer (other than himself or herself), (ii) Section 102(a)(1)(F) of the Family and Medical Leave Act of 1993 applied after March 31, 2021.

Brenda Fitch Real Estate Professional
Brenda Fitch Real Estate Professional

Qualified Family Leave Equivalent: The term ”qualified family leave equivalent amount” means, with respect to any eligible self-employed individual (Realtors, Brokers, and Real Estate Professionals), an amount equal to the product of (1) the number of days (not to exceed 60) during the taxable year that the individual is unable to perform services in any trade or business referred to in Code Sec. 1402 for a reason with respect to which such individual would be entitled to receive paid leave, multiplied by (2) the lesser of (i) 67 percent of the average daily self-employment income of the individual for the tax year, or (ii) $200.

Average Daily Self-Employment Income: The term ”average daily self-employment income” means an amount equal to (1) the net earnings from self-employment income of the individual for the taxable year, divided by (2) 260. An individual may elect to substitute “the prior tax year” for “the tax year.” The taxpayer can elect to not take a certain day or days into account. This credit is treated as a refundable credit.

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This blog post is intended to serve solely as an aid in continuing tax education for Don Fitch Accountancy blog, podcast, and/or email members. Due to the constantly changing nature of the subject of the materials, this product is not appropriate to serve as the sole resource for any federal tax, accounting opinion, tax return position, and must be supplemented for such purposes with other current authoritative materials. The information in this blog post has been carefully compiled from sources believed to be reliable, but its accuracy is not guaranteed. In addition, Don Fitch Accountancy is not engaged in rendering legal or other professional services and will not be held liable for any actions or suits based on this blog post, podcast, and/or email, or comments made during the above presentation. If legal advice or other expert assistance is required, seek the services of a competent professional.

(Updated 03/13/2021 08:05)

Published by Don Fitch, CPA

Offers in Compromise, Wage Levy Releases, Installment Agreements, IRS Audits, and much more IRS assistance. Also, allow us to Help you complete your Tax Returns from 1913 to present (100+ Years) and for any of the 50 States.

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