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The self-employed worker’s guide to getting through the coronavirus

Last updated: April 27, 2020

Self-employed workers and their employees represent more than a third of the working population in the United States. But many of them don’t have access to the same benefits and provisions employees and small businesses receive. Without unemployment pay and sick time, self-employed workers are among those facing the most financial hardship due to the coronavirus.

The president signed the Coronavirus Economic Aid, Relief, and Security (CARES) Act into law on March 27. If you’re self-employed, you may be wondering how it can help you.

The $2 trillion stimulus package includes provisions for self-employed workers. And the aid can’t come soon enough. Self-employed workers have lost thousands of dollars in revenue because of COVID-19, according to the Freelancers Union. And they stand to lose thousands more as their customers continue to cut back on goods and services. Some self-employed workers have already closed their doors due to coronavirus precautions.

If you’re one of them, you might be wondering how you’re going to get through the next few months without your regular income. There are several financial assistance measures, including the CARES Act, that you can use to mitigate losses.

Unemployment benefits

The economic stimulus plan has expanded unemployment benefits to include eligible self-employed workers whose employment was impacted by COVID-19. Under the Pandemic Unemployment Assistance program , eligible self-employed workers may receive up to 39 weeks of regular unemployment income if they aren’t receiving paid leave and are unable to telework. These benefits may cover unemployment as a result of COVID-19 between Jan. 27 and Dec. 31, 2020.

What’s more, eligible self-employed workers receiving unemployment benefits may also temporarily receive an additional $600 per week until July 31, 2020. This increased benefit is funded by the federal government and contingent upon the state agreeing not to decrease their existing unemployment benefits. Your previous year’s income will determine the state benefits you can receive.

Apply for unemployment benefits online through your state’s labor department.

Paycheck Protection Program

Eligible self-employed workers and independent contractors may apply for financial assistance through the Paycheck Protection Program (PPP). PPP loan amounts are calculated based on whether the self-employed workers employ other individuals.

Self-employed individuals (Schedule C filers), can calculate their maximum PPP loan amount by:

  1. Taking their net profit amount (in the case of no employees) or their 2019 payroll costs
  2. Divide it by 12
  3. Then multiply it by 2.5
  4. Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).

Learn more on page 6 of this summary from the Small Business Administration.

Funds can be used to replace owner compensation, and cover costs provided on their 2019 Form 1040 Schedule C that may include mortgage interest payments, rent payments, utility payments, and more.

Loans for eligible self-employed workers can be 100% forgiven, subject to certain requirements.

Intuit Aid Assist can help you determine whether you are eligible for a PPP loan.

Insurance coverage

Under the Families First Coronavirus Response Act, all comprehensive private insurance plans are required to cover FDA-approved COVID-19 testing during the declared public health emergency. That’s a welcome relief, given that treatment has cost some individuals tens of thousands of dollars.

Small business loan relief

If you’ve taken out a loan from the Small Business Administration (SBA), you may rest a little easier. The SBA Debt Relief efforts allow for the automatic detriment of principal and interest payments until December 31, 2020, and will help cover up to six months of the principal, interest, and fees of current 7(a), 504, and microloans.

Extended tax deadlines

The IRS has extended the tax filing deadline and deferred tax payments from April 15, 2020, to July 15, 2020. Extending the deadline gives taxpayers an additional 90 days to get back on their feet before paying owed taxes.

If you’re owed a tax refund, the IRS encourages you to file as soon as possible.

Families First Coronavirus Response Act

The Families First Coronavirus Response Act includes relief for small and midsize employers in the form of refundable tax credits for the cost of providing sick leave and family leave wages to their employees for leave related to the coronavirus.

Self-employed workers may be eligible for a similar tax credit. For more information, refer to the Internal Revenue Service (IRS).

Student loan relief

Nearly 45 million Americans carry student loan debt. A monthly student loan payment averages between $200 to $300 but can be much higher. It’s a cost many can’t afford because of income lost due to the coronavirus. Fortunately, there is some relief.

Any payments made to student loans held by the federal government and are owned by the U.S. Department of Education are suspended until September 30 under the CARES Act . That means no payments are required until then, but you’ll want to check your account online to be sure. Within a couple weeks, you should see that no payments are due. Another bit of good news—your loan will not accrue interest during the suspension period. You may consider contacting your federal student loan servicer to request an administrative forbearance. Many private student loan lenders are offering extended forbearance options and other benefits as well, but you will need to contact your individual lender or servicer for more information.

The following federal student loans owned by ED will have a 0$ interest until September 30, 2020:

  • Defaulted and nondefaulted Direct Loans
  • Defaulted and nondefaulted FFEL Program loans
  • Federal Perkins Loans

If you continue to pay your federal student loans, your monthly payments will not change. Your full payment will apply to your principal balance only.

Defer rent or mortgage payments

The Federal Housing Finance Agency is offering mortgage help to homeowners impacted by the coronavirus. If Fannie Mae or Freddie Mac owns your loan, you may be eligible to defer mortgage payments for up to 12 months. During the deferral period, you won’t incur late fees or have delinquencies reported to credit bureaus. Foreclosures will be suspended. At the end of the temporary relief period, additional assistance may be available.

For homeowners whose loans are not owned by Fannie Mae or Freddie Mac, relief plans may be in the works. Banks, finance companies, and mortgage investors proposed a plan to give borrowers impacted by the coronavirus a three-month break from mortgage payments. The plan may extend breaks up to 12 months. However, the finance industry groups say they need government support before moving forward. In the meantime, private mortgage lenders may also be willing to give temporary mortgage payment relief, and borrowers should reach out to their lenders to discuss.

Renters can visit Just Shelter for information on local organizations that can assist them. Landlords whose mortgages are owned by Fannie Mae or Freddie Mac may be eligible for forbearance alongside homeowners. If your landlord chooses to take advantage of that offer, they may provide rent relief to tenants. Keep in mind that landlords can still evict renters who skip payments. But some states have suspended eviction actions until further notice.

In addition, many states have temporarily suspended mortgage foreclosures and evictions to give impacted homeowners some additional time to make skipped payments.

Utility payment relief

The Federal Communications Commission’s Keep Americans Connected Initiative ensures Americans don’t lose internet or telephone connectivity as a result of the coronavirus. Over 700 companies have signed the pledge, including AT&T, Sprint, T-Mobile, and Verizon. These companies pledge for at least the next two months to not terminate services because of a customer’s inability to pay, to waive late fees, and to open Wi-Fi hotspots to everyone. If you need internet or telephone bill relief, call your internet and phone service providers.

Many water, gas, electric, and other utility companies have suspended shut-offs for non-payments. Check your local utility websites to see if your providers are offering similar relief.

Personal loan relief

Many banks may waive fees and defer payments on personal loans for borrowers dealing with the loss of income. Big banks include U.S. Bank, Bank of America, and Wells Fargo. If you need help making monthly payments on a personal loan, check your lender’s website or call to inquire about deferred payment options.

For those who haven’t taken out a loan yet but might need to, there’s news as well. There are a lot of low- and no-interest loans becoming available, and some may even be offered at your bank.

Government and state funding

You may be eligible for government relief funds, loans, or grants geared toward small businesses. For an updated list, check out this brief guide to coronavirus relief and assistance programs.

Keeping your revenue stream open while your doors are closed

At the end of the day, you have to do what you do best: work for yourself. If you can’t operate normally, it’s time to think outside the box. If you’re a dance instructor or art teacher, could you teach your classes virtually? If you’re a hairstylist, could you sell products online while you wait out the shutdown? If you’re a service provider, could you sell gift cards to carry you through the quarantine? Do what you can to keep some cash coming in and your business in the minds of your customers.

The resources described above are made available to businesses within the United States of America.

COVID-19 relief programs are evolving regularly. Please visit for the most up to date information.

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