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The COVID-19 pandemic has significantly impacted the self-employed sector, leading to financial hardships for many. In response, the U.S. government introduced various measures, including the Self-Employment Tax Credit (SETC), to provide financial relief. This blog post delves into the nuances of SETC, offering crucial insights to ensure self-employed individuals fully leverage this opportunity.

What is SETC?

The SETC is a tax credit designed to reimburse self-employed individuals, dollar-for-dollar, for lost income due to COVID-19 related disruptions. This includes situations like illness, quarantine, caregiving responsibilities, or the closure of schools and daycare centers.

Eligibility Criteria

To be eligible for SETC, you must have reported Schedule C or Schedule SE income on your federal tax returns for the years 2020 and/or 2021. This criterion encompasses sole proprietors, 1099 subcontractors, single-member LLCs, freelancers, and gig workers.

Claiming the Credit

The SETC claim process involves submitting amended tax returns for 2020 and/or 2021. The credit amount varies based on several factors, including the number of days your business was disrupted due to COVID-19 and whether you have dependents.

Key Points to Remember

  • Daily Value Calculation: The credit is based on your average daily earnings, with a cap of $511 per day for personal COVID-related issues and $200 for family-related leave.
  • Number of Days: You can claim up to 10 days for personal COVID issues and up to 50 days for family-related leave, particularly for childcare.
  • Avoiding Double Dipping: Ensure you reduce your claim by any sick or family leave already compensated by an employer.
  • Deadlines for Claims: The deadlines for claiming the SETC for the years 2020 and 2021 are different. It's essential to be mindful of these dates to ensure your claim is valid.


The SETC presents a substantial opportunity for self-employed individuals affected by the pandemic. Understanding the eligibility criteria, accurately calculating your claim, and adhering to deadlines are pivotal in maximizing this tax credit. For personalized guidance, consulting a tax professional is highly recommended.