We Love to Answer All Your Questions

The Family First Coronavirus Response Act (FFCRA) is a United States federal law enacted in March 2020 in response to the COVID-19 pandemic. It aimed to provide emergency paid sick leave, expanded family and medical leave, and enhanced unemployment benefits to individuals affected by the pandemic. The FFCRA required certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. Additionally, it provided tax credits to help employers offset the costs of providing these benefits. The FFCRA had various provisions that applied to different types of employers and employees, with the goal of supporting workers and their families during the public health emergency caused by the coronavirus outbreak.

In December 2020, under the CARES Act, self employed individuals were included to receive tax credit for sick and family leave.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a significant piece of legislation enacted by the United States Congress in March 2020 in response to the economic impact of the COVID-19 pandemic. The CARES Act aimed to provide financial relief to individuals, businesses, and healthcare systems affected by the pandemic. Some key provisions of the CARES Act include:

  1. 1. Economic Impact Payments: The CARES Act authorized direct payments to individuals and families to help alleviate financial strain caused by the pandemic. These payments, also known as stimulus checks, were sent to eligible taxpayers based on their income and filing status.
  2. 2. Small Business Assistance: The CARES Act established the Paycheck Protection Program (PPP) to provide forgivable loans to small businesses to cover payroll costs, rent, mortgage interest, and utilities. It also expanded the Economic Injury Disaster Loan (EIDL) program and provided grants to eligible businesses.
  3. 3. Unemployment Benefits: The CARES Act expanded unemployment insurance benefits by providing additional federal funding, extending benefits to self-employed individuals and gig workers, and increasing the duration of benefits.
  4. 4. Healthcare Funding: The CARES Act allocated funding to support healthcare providers, hospitals, and medical research efforts in combating the COVID-19 pandemic. It also included provisions to expand access to telehealth services.
  5. 5. Education and Housing Assistance: The CARES Act provided funding for K-12 schools, colleges, and universities to support distance learning and address other pandemic-related challenges. It also included measures to provide housing assistance and prevent evictions and foreclosures.

Overall, the CARES Act was intended to provide immediate economic relief and support to individuals, businesses, and communities affected by the unprecedented challenges posed by the COVID-19 pandemic.

The self-employed tax credit was created under the Family First Coronavirus Response Act (FFCRA) and extended by the American Rescue Plan Act (ARP). It is a financial aid program for self-employed individuals, freelancers, and independent contractors. This credit aims to compensate those who experienced a loss of income due to COVID-19 related reasons.

You can apply for the self-employed tax credit for the tax year 2021.The deadline to claim for 2020 was May 17th, 2024. However, you may use your net earnings from 2020 for your 2021 calculations.

The credit is calculated based on your net self-employment income, taking into account the number of days you couldn't work due to COVID related reasons. Here's a breakdown:

  1. Personally Sick: If you were unable to work because you were sick with COVID or quarantined, the credit equals your average daily net self-employment income, up to $511 per day, for a maximum of 10 days.
  2. Caring for a Child: If you were caring for a family member with COVID-or a child whose school or daycare was closed due to COVID, the credit is two-thirds of your average daily net self-employment income, up to $200 per day. For 2020, this is applicable for up to 50 days, and for 2021, up to 60 days.

Your average daily net self-employment income is calculated by dividing your annual net self-employment income by 260 (the average number of workdays in a year). The total credit you can receive is the aggregate of these calculations for the days you were eligible, subject to the daily and total day limits specified by the program.

The maximum credit is $32,220 per qualified taxpayer!

No, this credit is not a loan or a grant, nor is it taxable. Unlike loans, there's no requirement to repay this tax credit. Additionally, it is not considered as taxable income.

You'll receive your credit directly from the IRS in the form of a check mailed to your home. The processing time can vary, typically ranging between 16 to 24 weeks from the time of your application submission.

The processing time with the IRS can vary, typically ranging between 16 to 24 weeks from the time of your application submission to receiving your refund check.

If you owe back taxes, the IRS will apply any credit you are eligible for against your outstanding tax liabilities first, before you are directly compensated. This means the full amount of the credit may be used to reduce or eliminate your back taxes owed. If the credit exceeds the amount you owe, you will receive the remaining balance as a refund.

In order to calculate and claim your return, you will need to submit the IRS form 7202, “Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals”. Our software will automatically generate form 7202 once you complete the questionnaire and we pull your tax transcripts from the IRS.

Eligibility Questions

Here are the qualifications:

  1. 1. Self-Employment Status: You must have earned income as a self-employed individual, freelancer, or independent contractor during 2020 or 2021.
  2. 2. Impact of COVID-19: You were unable to work due to:
    a. COVID-19 illness
    b. Quarantine
    c. Caring for a family member affected by COVID-19
    d. Childcare unavailability because of COVID-19.

Income Criteria: Having net positive earnings from self-employment in the tax years you're claiming the credit for. This means that you paid taxes on your self-employed income, which should be reported on schedule SE form 1040 from the IRS.

For the SETC program, a self-employed individual is defined as someone who earns income directly from their own business, trade, or profession, rather than as an employee of another company. This includes freelancers, independent contractors, sole proprietors, and members of partnerships. To be considered self employed for this credit you will also need to have a schedule C and or schedule SE in your tax returns.

Some examples of self-employed work that would qualify you for the self-employed tax credit are:

  1. 1. Business owner: Product, trade, or any other service performed under your own business.
  2. 2. Independent Contract, Freelance, or Gig work: Some examples include, but are not limited to:
    a. Delivery Services: Independent contractors may work for delivery companies like DoorDash, Grubhub, Uber Eats, FedEx, UPS, or Amazon Flex, delivering packages or food orders.
    b. Construction: Independent contractors in construction may include carpenters, electricians, plumbers, painters, and general contractors who are hired to complete specific projects or tasks.
    c. Ridesharing and Transportation: Drivers for companies like Uber, Lyft, or taxi services operate as independent contractors, providing transportation services to passengers.
    d. Consulting: Independent contractors in consulting offer their expertise and services in various fields such as management consulting, IT consulting, marketing consulting, or financial consulting.
    e. Event Planning: Independent contractors in event planning may include event coordinators, wedding planners, or corporate event organizers who are hired to plan and execute events for clients.
    f. Creative Arts: Artists, musicians, actors, and performers often work as independent contractors, taking on freelance gigs or projects such as exhibitions, performances, or commissioned work.
    g. Information Technology (IT): Independent contractors in IT may work as software developers, web designers, IT consultants, or cybersecurity experts, providing services to businesses on a contract basis.
    h. Healthcare: Independent contractors in healthcare include physicians, traveling nurses, therapists, or medical specialists who provide temporary or specialized services to healthcare facilities.
    i. Freelance Writing and Editing: Writers, editors, and journalists often work as independent contractors, providing content creation, editing, or proofreading services to clients.
    j. Personal Services: Independent contractors in personal services may include hairstylists, personal trainers, massage therapists, or private tutors who offer their services on a freelance basis.

Yes, you can use your previous years net income if it was higher. For 2021, you may use your 2020 net income if it was larger than 2021.

Yes, if you were both a W2 employee and self-employed, you can still qualify for the tax credit, as long as your self-employed work meets the SETC program's eligibility criteria. However, if you already claimed your full sick and family leave as a W2 employee, you may not be eligible to receive more.

Yes, if you and your spouse both qualify as self-employed and filed taxes jointly, you're each eligible to claim the credit. However, you must create an account together as you will both be able to claim days under one account. DO NOT create separate accounts.

Yes, you can count weekends as missed work days for the credit if those days are typical working days for your self-employment activities and you were unable to work due to COVID-19 related reasons.

Application Process

  1. 1. Complete a brief questionnaire on our website to determine if you meet the basic eligibility criteria for the SETC program. This information will be used to receive your tax refund. 
  2. 2. Verify your identity through our secure process to enable us to access your tax information directly from the IRS. This means no document uploads!
  3. 3. Our team calculates your exact credit using the retrieved tax information and prepares the necessary documentation for claiming the credit.
  4. 4. You review the calculated credit and, upon agreement, submit your payment for our services.
  5. 5. In your client portal, download and print your tax documents for 2020 and/or 2021. Each year of documents requires 2 signatures. One on the document labeled 1040-X and the second on the document labeled 1040.
  6. 6. Put each year's documents in two separate envelopes and bring them to USPS to mail. We will provide the correct IRS address for mailing in your instructions.
  7. 7. Throughout the process, we'll provide regular updates on your application's status, from the initial submission to the IRS's final processing of your credit. The IRS may take 4-6 months to send your refund check.

There's no need for you to upload any documents manually! To apply, you simply need to complete our questionnaire, verify your identity, and authorize us to access your tax information. We'll then electronically retrieve your tax returns from the IRS and calculate your exact refund amount.

Yes, the deadline to claim your 2020 tax return is May 17, 2024! Don’t wait, claim your credits now! The deadline to claim your 2021 tax return is April 15, 2025.

Log in to your customer dashboard for all updates. We’ll also keep you updated with text and email notifications throughout the process!

Yes! Filing your 2023 taxes does not impact your ability to claim your SETC refund check. Remember, if you still owe taxes, the refund check will automatically be applied to your back taxes balance.

Yes the SETC credit is 100% legit. The program was created by our government to help self-employed individuals who were financially affected by COVID. Thousands of people have already successfully received their return.

Fees and Payment

Yes, flexible payment plans are available through paypal. We offer a variety of different payment plans.

No this will not affect your credit score! Our process does not include any credit inquiries.

Yes, just like filing your normal taxes, you are able to file and claim the SETC credit on your own. This requires filling out all the proper tax documents and calculations correctly. However, this is why we started SETC Tax Return. We do all the heavy lifting for you. All you need to do is complete a short questionnaire and verify your identity.