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

To be eligible for the SETC, individuals must have generated self-employment earnings in either 2019, 2020, or 2021, and experienced a work interruption as a result of COVID-19.

• This could include:
  
  
  
  • Unable to work because of a quarantine or isolation directive
  
  
  • Experiencing COVID-19 symptoms and seeking a medical diagnosis
  
  
  • Providing assistance to an individual with COVID-19 or in quarantine
  
  
  • Parents dealing with the closure of their children's school or childcare facilities because of the pandemic
  
  
  
  

It is not necessary to have a COVID-19 diagnosis to qualify.

Claiming the SETC

• Form 7202 must be submitted along with your 2020 and/or 2021 tax returns to receive the SETC.

The credit claiming deadline has been extended until April 2025.

• Collect all required paperwork and submit your filing promptly.

Determining Your SETC Payment Amount

- Calculate your net self-employment earnings for the tax year.
Calculate your average daily self-employment income by dividing your net self-employment earnings by 260.
Calculate the total loss of income by multiplying your average daily self-employment earnings by the days you couldn't work because of COVID-19.

1. Make sure to adjust your calculation if the estimated credit exceeds the daily limits.

Take advantage of this valuable opportunity before it slips away. Don't let this chance pass you by.
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 individuals qualify for the Self-Employed Tax Credit (SETC)?


2. What amount of financial relief is available through the SETC?

How can the SETC be claimed?
When is learn more to claim the SETC?

3. Is a COVID-19 diagnosis required to qualify for the SETC?

Is it possible to claim the SETC if other COVID-19 relief has been received?

4. Does the SETC incur taxes?

How do I calculate my SETC amount?

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