The SETC Tax Credit

What is the SETC Tax Credit?

The SETC, short for "Self-Employed Tax Credit", is a unique tax credit created to give financial relief to self-employed workers who were negatively affected by the COVID-19 pandemic.  setc tax credit  was implemented as part of the Families First Coronavirus Response Act (FFCRA) to support sole proprietors, independent contractors, gig workers, and other self-employed professionals facing 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 eligible self-employed people can receive 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, likely leading to a significant increase in their tax refund.

The SETC tax credit is intended to give self-employed people financial support similar to the paid sick and family leave benefits typically offered to employees. By offering 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.