IRS-ADVOCATES

What Is Needed To Qualify For SETC?

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To claim the SETC Tax credit IRS 2024, you need to submit the following documents:

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• Your tax returns for the 3 years (2019, 2020, 2021) - POSITIVE INCOMES are best.

          *If you need to locate your tax returns go to (www.IRS.gov) and you can request your

              pin number and download your tax returns.

• You must have been self-employed

• Were you affected by COVID-19 or did you care for someone affected by COVID-19

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The Self-Employed Tax Credit (SETC)

This was established by the Families First Coronavirus Response Act in 2020,  that offered tax relief to self-employed individuals impacted by the COVID-19 pandemic. The maximum credit amount may be up to $32,220.

 

 

COVID Impacts:

Whether you battled COVID, experienced COVID-like symptoms, needed to quarantine, underwent testing, or cared for a family member affected by the virus, the SETC could be your financial relief. If the closure of your child’s school or daycare due to COVID restrictions forced you to stay home and impacted your work, there’s assistance for you.

 

This credit is designed to provide financial relief to self-employed individuals who experienced:

1) Work was impacted due to Covid related issues for yourself, between January 01, 2021 to

     March 31, 2021, a maximum of 10 days each.

2) Income disruptions due to caring for a relative due to COVID-19-related reasons, between

     April 1, 2020, and September 30, 2021, a maximum of 50 days each.

 

 

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SETC Tax Credit Eligibility Criteria

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What is the Criteria for SETC?:

• You must have a positive net income from self-employment on your IRS Form 1040 Schedule SE for either 2019, 2020, or 2021. This shows you were actively self-employed during the qualifying period.

• COVID-19 Impact: You need to demonstrate that your earned income from self-employment was reduced due to COVID-19. This could be because of:

  • Experiencing illness yourself

  • Caring for a sick family member

  • Quarantining due to potential exposure

  • Reduced business activity due to pandemic restrictions

• There is no minimum or maximum income threshold for eligibility.

• The credit amount is capped at $32,220 per year for both 2020 and 2021.

• The actual credit amount you receive depends on your average daily self-employment income and the number of weekdays you couldn’t work due to COVID-19 (always capped at the annual maximum).