The SETC Tax Credit

What is the SETC Tax Credit?

The SETC, short for "Self-Employed Tax Credit", is a unique tax credit designed to provide financial relief to self-employed workers who were adversely impacted by the COVID-19 pandemic. This credit was introduced as part of the Families First Coronavirus Response Act (FFCRA) to support sole proprietors, independent contractors, gig workers, and other self-employed professionals experiencing 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 entitled self-employed people can get the credit as a refund, even if they have no tax liability. The credit essentially reduces their tax burden on a dollar-for-dollar basis, potentially leading to a significant increase in their tax refund.

setc tax credit  seeks to offer self-employed workers financial support similar to the paid sick and family leave benefits typically offered to employees. By providing this credit, the government acknowledges the unique challenges faced by the self-employed sector during the pandemic and seeks to mitigate income disruptions and promote greater financial stability for these professionals.