Self Employed Tax Credit
Get up to $32,220
1099 Contractors and Self Employed Business Owners Affected By COVID-19 Can Get Federal Tax Refunds Immediately
What's SETC?
(Self-Employed Tax Credit)
The SETC is a specialized tax credit designed to provide support to self-employed individuals during the COVID-19 pandemic. It acknowledges the unique challenges faced by those who work for themselves, especially during times of illness, caregiving responsibilities, quarantine, and related circumstances.
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New IRS form available for self-employed individuals to claim COVID-19 sick and family leave tax credits under FFCRA R-2021-31, February 8, 2021
WASHINGTON — The Internal Revenue Service announced today that a new form is available for eligible self-employed individuals to claim sick and family leave tax credits under the Families First Coronavirus Response Act (FFCRA).
Eligible self-employed individuals will determine their qualified sick and family leave equivalent tax credits with the new IRS Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed IndividualsPDF. They'll claim the tax credits on their 2020 Form 1040 for leave taken between April 1, 2020, and December 31, 2020, and on their 2021 Form 1040 for leave taken between January 1, 2021, and March 31, 2021.
Is There a Tax Credit for Self-Employed Workers Affected by the Coronavirus?
The Families First Coronavirus Response Act (FFCRA) came to the rescue for many self-employed taxpayers during the pandemic. The act, signed into law on March 18, 2020, initially provided tax credits to eligible taxpayers who could not work from April through December 31, 2020, due to COVID-19. The credit was extended to March 31, 2021. This carryover period from January through March 31, 2021, allowed eligible taxpayers to claim any unused sick leave or paid leave credits from 2020. The FFCRA laid the ground rules for how the credits worked, who is eligible, and how the credit is calculated.
On March 11, 2021, President Joe Biden signed the American Rescue Plan Act. This extended the tax credits for self-employed workers through September 30, 2021. This means that taxpayers affected April 1 - September 30, 2021, can claim the credits on their 2021 tax return.
Below, we break down the credits available for self-employed taxpayers under FFCRA
New form from IRS lets the self-employed claim sick and family leave tax credits
The Bureau of Labor Statistics counts self employment in different ways, but estimates that there are close to 10 million, with projections that this number will grow by 8% each year for the foreseeable future. And while much of the COVID-relief packages have been focused on businesses and families, little media attention has been paid to relief offered to those who are self-employed.
But in February of 2021, the Internal Revenue Service announced that a new form is available for eligible self-employed individuals to claim sick and family leave tax credits under the Families First Coronavirus Response Act (FFCRA).
Anthony Gambale
Financial Strategist
anthony@totalebusinesssolutions.info
(631) 343-3190
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