Financial Help for Freelancers and Independent Contractors Affected by the Coronavirus Crisis
by Richard Harroch,
April 1, 2020

What financial assistance may be available to help freelancers and independent contractors? In this article I list some possibilities, mainly as a result of the March 27, 2020 passage of the CARES Act by the federal government, which injected $2.2 trillion of assistance to companies, state governments, freelancers, small businesses, and employees.

1. Unemployment Compensation Benefits Are Now Available to Freelancers and Independent Contractors
Unemployment compensation benefits were usually reserved only for employees who were laid off from their job. Under the CARES Act, independent contractors and freelancers are now eligible to receive unemployment benefits as well. The CARES Act even increases the amount of benefits by $600 a week.

To claim the unemployment benefits, freelancers and contractors should log on to their state’s unemployment websites and apply as soon as possible for benefits. For example, the California site is at

Unfortunately, the unemployment compensation websites are still being updated to take the new law into account, and the instructions will be confusing for independent contractors. In addition, the sites are being inundated with applications. Phone calls are being unanswered due to sheer volume. The best thing to do at the moment is to file online as best you can and hope that the state follows up with any questions.

The amount of unemployment benefits will depend on what state you are in and what your income has been as an independent contractor. The benefits typically are 20% to 50% of what you previously earned, together with the extra $600 per week provided by the CARES Act.

Many states provide for 26 weeks of benefits. The CARES Act provided eligible employees and freelancers with an additional 13 weeks.

2. $1,200 Payment from the IRS
Independent workers and freelancers are entitled to receive a $1,200 payment ($2,400 for married couples) from the IRS, plus an additional $500 per dependent 16 years or younger. In order to qualify for the full amount, you have to have earned $75,000 or less in the prior year ($150,000 or less if married). If you haven’t prepared your 2019 tax return, you can use your 2018 return to see if the income threshold is met.

In order to make sure you receive this amount in a timely manner, your 2018 or 2019 tax return should have been filed with the IRS. If you haven’t filed your tax return, there are some free services that allow you to file your return electronically. See those recommended by the IRS at

You will ideally want to receive this amount by direct deposit into your bank/checking account, so make sure the IRS has this information. You can do this by filing IRS Form 8888. The IRS has also said that it would build an online portal soon where people can update this information.
You will not have to pay income tax on the amount of payment received.

$10,000 Grant to Freelancers and Independent Contractors
Under the CARES Act, independent contractors and freelancers are eligible to receive a government grant of up to $10,000. You are not required to repay this money to the government. The application process involves filling out an SBA form, requesting an Economic Injury Disaster Recovery Loan, which provides for a quick advance of up to $10,000 even if the loan is not granted.

Here are the particular steps to take, with advice on how to fill out the application:
  • Go to
  • On the first question, check the second box as you are applying as an independent contractor or sole proprietorship.
  • You must add your social security number if you are applying as an individual independent contractor.
  • The form will ask you for the gross revenues for the last 12 months for your independent contractor business and the “cost of goods sold.” You can estimate this based on what happened in 2019. Cost of goods sold means the expenses of operating as a freelancer or independent contractor.
  • Where it asks for “Owner” put your name and “100” percent owner.
  • It will ask for the date the business was established. This is the date you started doing freelance or independent contractor work. Just estimate if you don’t have the exact date.
  • The form will ask for the bank account you want the grant money wired to. You need the name of your bank, the account number (the middle number at the bottom of your checks), and the routing number (the number at the bottom left of your checks).
  • For your business phone number, it’s ok to give your cell number.
  • On the question “Is your business owned by a business entity”—the answer is no since you are an individual owner.
  • When the form asks for your business name, just enter your individual name if you don’t have a business name.
  • You can ignore the question “If anyone assisted you in completing this application …” unless you have actually gotten help.
The form should take about 15 minutes to fill out. The SBA supposedly will act quickly in making the grants. It’s not clear how the SBA will determine the exact amount to be granted.

Rent Deferral
A number of independent contractors and freelancers are having difficulty paying their rent. Some jurisdictions have enacted legislation prohibiting evictions during the crisis.

The CARES Act also put a temporary eviction moratorium for any tenants whose landlords have mortgages backed by federal entities (such as Fannie Mae). This lasts for 120 days after March 27, 2020.

A number of freelancers and independent contractors are requesting their landlords defer the rent due for a few months until they can start earning money again. If that doesn’t work, consider asking that your security deposit be used to cover the rent due for the next month or consider requesting the opportunity to pay half of the rent for a few months.

Other Potential Sources of Financial Assistance for Freelancers and Independent Contractors
Here are some other resources that may be helpful to freelancers, independent contractors, and small businesses:
  • The Small Business Administration is offering Economic Injury Disaster Loans for up to $2 million.
  • Facebook launched a $100 million grant for small businesses affected by the COVID-19 crisis.
  • Freelancers Union created a fund that will offer financial assistance of up to $1,000 per freelancer.
  • Google has pledged to donate $800 million to help small businesses gain access to capital.

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