Sec. 7004. CREDIT FOR FAMILY LEAVE FOR CERTAIN SELF-EMPLOYED INDIVIDUALS
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## SEC. 7004 CREDIT FOR FAMILY LEAVE FOR CERTAIN SELF-EMPLOYED INDIVIDUALS **[**[26 U.S.C. 1401 note](/us/usc/t26/s1401)**]** ###
(a)Credit Against Self-Employment Tax In the case of an eligible self-employed individual, there shall be allowed as a credit against the tax imposed by subtitle A of the Internal Revenue Code of 1986 for any taxable year an amount equal to 100 percent of the qualified family leave equivalent amount with respect to the individual. ###
(b)Eligible Self-Employed Individual For purposes of this section, the term “eligible self-employed individual” means an individual who— ####
(1)regularly carries on any trade or business within the meaning of section 1402 of such Code, and ####
(2)either— #####
(A)would be entitled to receive paid leave during the taxable year pursuant to the Emergency Family and Medical Leave Expansion Act if the individual were an employee of an employer (other than himself or herself), or #####
(B)would be so entitled if— ######
(i)section 102(a)(1)(F) of the Family and Medical Leave Act of 1993, as amended by the Emergency Family and Medical Leave Expansion Act, were applied by substituting “March 31, 2021” for “December 31, 2020”, and ######
(ii)the individual were an employee of an employer (other than himself or herself). ###
(c)Qualified Family Leave Equivalent Amount For purposes of this section— ####
(1)In general The term “qualified family leave equivalent amount” means, with respect to any eligible self-employed individual, an amount equal to the product of— #####
(A)the number of days (not to exceed 50) during the taxable year that the individual is unable to perform services in any trade or business referred to in section 1402 of such Code for a reason with respect to which such individual would be entitled to receive paid leave as described in subsection (b), multiplied by #####
(B)the lesser of— ######
(i)67 percent of the average daily self-employment income of the individual for the taxable year, or ######
(ii)$200. ####
(2)Average daily self-employment income For purposes of this subsection, the term “average daily self-employment income” means an amount equal to— #####
(A)the net earnings from self-employment income of the individual for the taxable year, divided by #####
(B)260. #### (4)9 Election to use prior year net earnings from self-employment income In the case of an individual who elects (at such time and in such manner as the Secretary, or the Secretary’s delegate, may provide) the application of this paragraph, paragraph (2)(A) shall be applied by substituting “the prior taxable year” for “the taxable year”. 9There is no paragraph
(3)in law. ###
(d)Special Rules ####
(1)Credit refundable #####
(A)In general The credit determined under this section shall be treated as a credit allowed to the taxpayer under subpart C of part IV of subchapter A of chapter 1 of such Code. #####
(B)Treatment of payments For purposes of section 1324 of title 31, United States Code, any refund due from the credit determined under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. ####
(2)Documentation No credit shall be allowed under this section unless the individual maintains such documentation as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe to establish such individual as an eligible self-employed individual. ####
(3)Denial of double benefit In the case of an individual who receives wages (as defined in section 3121(a) of the Internal Revenue Code of 1986) or compensation (as defined in section 3231(e) of the Internal Revenue Code) paid by an employer which are required to be paid by reason of the Emergency Family and Medical Leave Expansion Act, the qualified family leave equivalent amount otherwise described in subsection
(c)shall be reduced (but not below zero) to the extent that the sum of the amount described in such subsection and in section 7003(b)(1) exceeds $10,000. ####
(4)Certain terms Any term used in this section which is also used in chapter 2 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter. ####
(5)References to emergency family and medical leave expansion act Any reference in this section to the Emergency Family and Medical Leave Expansion Act shall be treated as including a reference to the amendments made by such Act. ###
(e)Application of Section Only days occurring during the period beginning on a date selected by the Secretary of the Treasury (or the Secretary’s delegate) which is during the 15-day period beginning on the date of the enactment of this Act, and ending on March 31, 2021, may be taken into account under subsection (c)(1)(A). ###
(f)Application of Credit in Certain Possessions ####
(1)Payments to possessions with mirror code tax systems The Secretary of the Treasury (or the Secretary’s delegate) shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of the provisions of this section. Such amounts shall be determined by the Secretary of the Treasury (or the Secretary’s delegate) based on information provided by the government of the respective possession. ####
(2)Payments to other possessions The Secretary of the Treasury (or the Secretary’s delegate) shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury (or the Secretary’s delegate) as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the provisions of this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury (or the Secretary’s delegate), under which such possession will promptly distribute such payments to its residents. ####
(3)Mirror code tax system For purposes of this section, the term “mirror code tax system” means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. ####
(4)Treatment of payments For purposes of section 1324 of title 31, United States Code, the payments under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. ###
(e)Regulations The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— ####
(1)regulations or other guidance to prevent the avoidance of the purposes of this Act, and ####
(2)regulations or other guidance to minimize compliance and record-keeping burdens under this section.
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Sec. 7004
CREDIT FOR FAMILY LEAVE FOR CERTAIN SELF-EMPLOYED INDIVIDUALS
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