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posted Mar 11, 2021 7:38:13 PM

Covid19 lost wages

My business (pilates studio) had to shut down during the Covid-19 quarantine period.  Can I claim the lost wages during that time as a deduction on Schedule C?

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1 Replies
Level 8
Mar 11, 2021 8:40:01 PM

Unfortunately not. The IRS says "you generally can't take a bad debt deduction for unpaid salaries, wages, rents, fees, interests, dividends, and similar items." In might sound unfair but the IRS thinks you can't take a deduction for money you might have earned had their been no quarantine since there's no guarantee you would have earned that money.