The SETC Tax Credit: What Self-Employed Individuals

Need to Know
What is the SETC Tax Credit?
The SETC, meaning "Self-Employed Tax Credit," is a financial aid program created to help self-employed individuals
who have been affected by the COVID-19 pandemic. This payable tax credit, not a loan, can provide significant
assistance to those who qualify.

SETC Tax Credit Eligibility

To be eligible for the SETC tax credit, you must be a self-employed person, such as a sole proprietor, independent
contractor, gig worker, or freelancer. You must have self-employment income reported on your 2020 or 2021 tax return
and have been unable to work due to COVID-19 related reasons.

How Much is the SETC Tax Credit?

The SETC tax credit can provide up to $32,220 in relief for eligible self-employed workers. The credit amount is
calculated based on your average daily self-employment income and the number of days you were unable to work due to
COVID-19. Online SETC tax credit calculators are available to help determine your potential credit.

How to Apply for the SETC Tax Credit

To claim the SETC tax credit, you must file Form 7202 with your 2020 or 2021 income tax return. Having all required
documentation, like past tax returns, is crucial for the application process. Remember that applying for the SETC tax
credit Discover more here does not impact your current year's tax return, as it is a retroactive process.

SETC Tax Credit Deadlines

The deadline for claiming the SETC tax credit for the 2020 tax year is April 15, 2024. For the 2021 tax year, the deadline
is April 15, 2025. It’s essential to keep these dates in mind when planning to apply for the credit.

Frequently Asked Questions About the SETC Tax Credit

Are SETC tax credits taxable? No, the SETC refund is not considered taxable income.

How long does it take to get the SETC refund? The processing time can vary, but it typically takes around 9 weeks for
clients to receive their refund.

What if I already filed my 2020/2021 tax return? You can still claim the SETC tax credit by filing an amended return.
Don't Miss Out on the SETC Tax Credit in 2023 and 2024
Self-employed workers who have been affected by the COVID-19 pandemic should investigate their eligibility for the
SETC tax credit, as it can give substantial financial relief. With deadlines approaching in 2024 and 2025, now is the time
to gather your documentation and look into your options for claiming this valuable credit.