SETC Tax Credit

The Self-Employed Tax Credit (SETC) has been introduced by the government to provide financial relief to self-employed individuals impacted by the COVID-19 pandemic. Entrepreneurs, freelancers, and independent contractors who have experienced a qualified sick or family leave related to COVID-19 may be eligible for up to $32,220 in refundable tax credit.

SETC Eligibility

In order to be eligible for the SETC, individuals must have generated self-employment earnings in the years 2019, 2020, or 2021 and experienced a disruption in work as a result of COVID-19.

• This could include:
  
  
  
  • Inability to work because of a quarantine or isolation mandate
  
  
  • Seeking a medical diagnosis for COVID-19 symptoms
  
  
  • Providing care for an individual with COVID-19 or in quarantine
  
  
  • Dealing with the closure of schools or childcare facilities for children because of the pandemic
  
  
  
  


• Eligibility is not dependent on having a COVID-19 diagnosis.

Claiming the SETC

• Submit Form 7202 with your 2020 and/or 2021 tax returns to receive the SETC.

The credit claiming deadline has been extended until April 2025.

• Collect required documents and submit promptly.

Determining Your SETC Estimate

1. Calculate your total self-employment income for the tax year.

Calculate your average daily self-employment income by dividing your net self-employment earnings by 260.

2. Calculate the total income lost during the period you were unable to work due to COVID-19 by multiplying your average daily self-employment income by the number of days affected.


3. Make sure to adjust your calculation if the estimated credit amount surpasses the daily limits.

Make sure you take advantage of this valuable opportunity.
If you meet the requirements for the SETC, be sure to check your eligibility and begin the claiming process. With the deadline now extended to April 2025, you have plenty of time to collect all required documentation.

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1. What qualifications are needed to be eligible for the Self-Employed Tax Credit (SETC)?

What amount of financial relief is available through the SETC?
How can one claim the SETC?
When is this guide has details to claim the SETC?
Is a COVID-19 diagnosis necessary for eligibility for the SETC?
Can the SETC be claimed if other COVID-19 relief has been received?

2. Does the SETC incur taxes?


3. What is the best way to calculate my SETC amount?

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