The SETC Tax Credit

What is  this guide has details ?

The SETC, short for "Self-Employed Tax Credit", is a specific tax credit designed to give financial relief to self-employed individuals who were harmed by the COVID-19 pandemic. This credit was brought in as part of the Families First Coronavirus Response Act (FFCRA) to support sole proprietors, independent contractors, gig workers, and other self-employed professionals dealing with economic challenges due to the pandemic.

One of the key features of the SETC tax credit is that it is a refundable credit, not a loan. This means that qualified self-employed individuals can obtain the credit as a refund, even if they have no tax liability. The credit significantly reduces their tax burden on a dollar-for-dollar basis, potentially leading to a significant increase in their tax refund.

The SETC tax credit is intended to give self-employed individuals financial support comparable to the paid sick and family leave benefits typically offered to employees. By giving this credit, the government acknowledges the unique challenges faced by the self-employed sector during the pandemic and aims to mitigate income disruptions and promote greater financial stability for these professionals.